Stock Market: The calm before the storm? Europe facing uncertainty over Fed decisions

European stock markets are expected to take a pause this Tuesday, after a week of consecutive gains. Stock investors are eagerly awaiting the release of the minutes from the last meeting scheduled for Wednesday.

A consolidation expected for the European stock market

According to the first indications from the stock exchange, European indices should fall slightly this Tuesday.

• The CAC 40 index in Paris is expected to lose 0.32% at the opening
• The Dax index in Frankfurt could fall by 0.25%.
• The FTSE 100 in London should drop by 0.54%.
• The EuroStoxx 50 index is expected to decline by 0.28%.

This consolidation on the stock exchange is expected after the recent market gains stimulated by expectations of interest rate cuts by the Fed.

Stock market: cautious signals from the Fed

However, several members of the FOMC emphasized on Monday that the persistence of inflation should prompt the central bank to be cautious. The Fed meeting minutes, published on Wednesday at 6:00 PM GMT, should provide new clues about the depth of the debates within the U.S. central bank. These can impact the stock market in general.

The stock market currently anticipates two rate cuts in the United States:

• the first in September,
• the second in November or December.

The release of the Fed’s meeting minutes could nonetheless alter these expectations.

Other indicators to watch for stock investors

In addition to the Fed minutes, stock investors will also closely follow Germany’s monthly producer prices released this Tuesday. These data could give an indication of the inflation dynamics in the eurozone.

In Asia, markets were also cautious this Tuesday:

• The Nikkei index in Tokyo fell by 0.07%
• The MSCI index lost 0.6%.
• The SSE Composite and CSI 300 indices in Shanghai fell by 0.46% and 0.45%, respectively.

This week, stock investors would do well to closely follow the news.