The leading German index lost up to 1.1 percent to 18,424 points. The EuroStoxx50 fell by 0.9 percent. Commodity prices also fell significantly in some cases. Following the interest rate decision on Wednesday evening, Fed Chairman Jerome Powell signaled that the US central bank will probably not cut interest rates more than once this year. "Words that no stock market trader likes to hear," stated Christian Henke from broker IG. The expectations of market participants had been far greater, but in the end, stock market participants could still be happy about the one interest rate cut, the expert believes.
Despite recent signs of easing on the price front, the Fed remains cautious. At their meeting, the monetary authorities left the key monetary policy rate in the range of 5.25 to 5.50 percent. At the same time, they are only forecasting one interest rate cut on average for 2024. In March, they were still considering three cuts. It also remains unclear when the long-awaited turnaround in interest rates, which many investors hope will revive the economy, will take place. "At the moment, the Fed lacks the confidence to name a specific date for a first rate cut," writes CMC Markets analyst Jochen Stanzl. The US central bank wants to continue to wait and observe the data before taking action.
DOLLAR SOMEWHAT FIRMER - EURO HARDLY CHANGED
On the currency market, the US currency recovered from its recent losses - the dollar index advanced by up to 0.2 percent to 104.85 points. The euro was flat at 1.0808 dollars.
Commodity investors were dominated by concerns that high US interest rates could weaken the economy and weaken demand for oil and copper. Brent North Sea oil and WTI US oil both fell by 0.7% at times to USD 82.06 and USD 78.47 per barrel respectively. The industrial metal copper traded 1.6 percent lower at 9781 dollars per ton at its peak. The price of gold also lost ground, falling by up to 0.6 percent to 2308 dollars per troy ounce.
CAR STOCKS COME UNDER THE WHEELS
On the corporate side, car stocks once again came into focus. Uncertainty as to how China will react to the punitive tariffs announced by the EU Commission on electric cars from the People's Republic weighed on sentiment in the sector. The European car index fell by 2.2 percent at times. Volvo Car slipped by almost six percent on the Stockholm Stock Exchange. In the DAX, Porsche, Volkswagen, BMW and Mercedes-Benz lost between 3.9 and 1.5 percent. China called on the EU Commission on Thursday not to instigate a new trade conflict. A spokesman said that China would take all necessary steps to counter the measures.
In the MDax, Lufthansa shares took a dive after a negative comment from JP Morgan. The shares lost 7.1 per cent to EUR 5.84 at their peak, marking their lowest level since October 2022. The analysts have placed the shares on the "Negative Catalyst Watch" ahead of the publication of the second interim report and lowered the price target to EUR 5.60 (5.70). They expect the second quarter to be rather weak in terms of profitability compared to the previous year.
Investors were eagerly awaiting Tesla's Annual General Meeting later in the day. According to Group CEO Elon Musk, the shareholders will approve the 56 billion dollar remuneration package for him by a large majority. According to a post on his short messaging service X, the manager also assumes that the shareholders will vote in favor of moving the company's legal domicile from Delaware to Texas. Tesla shares rose by more than six percent in pre-market US trading.
(Report by: Daniela Pegna, edited by Sabine Ehrhardt. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
