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US dollar weakens as Fed concerns grow

The US dollar tumbled to multi-year lows against the euro and Swiss franc on Thursday, as reports suggesting US President Donald Trump may seek to replace Federal Reserve (Fed) Chair Jerome Powell raised fears over the Fed’s independence. This uncertainty weighed on confidence in US monetary policy, pushing the euro to its highest level since 2021 and dragging the dollar index to early 2022 lows. Meanwhile, US equity markets closed mixed, with the Nasdaq-100 hitting a record high. Asian chip stocks rallied on Nvidia’s surge, lifting Japan’s Nikkei 225 but leaving other regional indices under pressure. European stocks closed in the red on Thursday.

  • Date
  • Author Shane Strowmatt, LGT
  • Reading time 5 minutes

US dollars
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US stock markets ended Wednesday's session with mixed results, as the Nasdaq-100 reached a record high of 22,329 points in early trading before closing up 0.2% at 22,237.74 points, driven by gains in Nvidia shares, which reached a record high on Wednesday, climbing over 4% to USD 154.10. However, other indices faltered, with the Dow Jones Industrial falling 0.3% to 42,982.43 points and the S&P 500 remaining flat at 6092.16 points.

Nvidia's rally boosts Asian chip stocks

Asian semiconductor stocks surged on Thursday as Nvidia reclaimed its position as the world’s most valuable company, driven by record-high shares. Beneficiaries included South Korea’s SK Hynix, Taiwan’s TSMC and Hon Hai Precision Industry, and Japanese firms such as Advantest, Softbank, Tokyo Electron, Lasertec, and Renesas Electronics. Nevertheless, the sector’s gains could pull many broader Asian stock market indices out of the red on Thursday. Japan’s Nikkei 225 surged 1.5%, buoyed by optimism in the technology sector, while mainland China’s CSI 300 was trading flat. Korea’s Kospi fell 1.1%, pressured by weakness in export-driven industries, and Hong Kong’s Hang Seng Index declined 0.7%. Australia’s S&P/ASX 200 was slightly lower, down 0.1%.

NATO raises defence spending to 5% of GDP

NATO leaders agreed on Wednesday to increase defence spending to 5% of GDP by 2035, addressing long-standing demands from former US President Donald Trump and concerns over Russia's growing threat following its 2022 invasion of Ukraine. The alliance reaffirmed its commitment to collective defence under Article 5, while French President Emmanuel Macron raised concerns about US trade policies potentially hindering European defence budgets. The new target includes allocations for cyber security and infrastructure upgrades.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Hennes & Mauritz, Mühlbauer, and Walgreens Boots Alliance. Annual general meetings at QIAGEN.

Economic data in focus: German GfK Consumer Climate (08:00), Bank of England Governor Bailey speaks (13:00), US weekly initial jobless claims (14:30), US gross domestic product annualized (14:30), US pending home sales (16:00).

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Global economic and market trends at a glance

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.