US stock futures held steady on Thursday after a strong rally in the previous session, driven by Donald Trump’s decisive victory in the US presidential election. The rally pushed major indices to new record highs, with investors now turning their attention to the Federal Reserve’s upcoming interest rate decision. In Wednesday’s regular session, the Dow surged 3.57%, the S&P 500 rose 2.53%, and the Nasdaq Composite gained 2.95%. The small-cap Russell 2000 saw an even larger jump, climbing over 5%. The surge followed investor optimism that a second Trump administration would usher in pro-business policies, including tax cuts, deregulation, and tariffs, which are seen as catalysts for economic growth and corporate earnings. Leading the charge were sectors expected to benefit most from Trump’s agenda, such as financials, energy, and industrials. Megacap tech stocks also saw strong gains, while renewable energy stocks and Chinese companies lagged.
The DAX soared 1.2% to trade around the 19260 level on Thursday, following a 1.1% drop in the previous session that sent the benchmark index to one-month lows, amid concerns about the impact of the Donald Trump election in the European economy. The auto sector rebounded from a big hit on Wednesday, namely Mercedes-Benz (1.6%), BMW (2.5%), Porsche (3.4%) and VW (2.6%). At the same time, corporate results boosted investors' sentiment. Daimler Truck soared almost 5% after keeping its guidance. Also, Rheinmetall soared 1.8% after reporting a surge in Q3 sales and Munich Re added 0.9% after raising its 2024 insurance revenue forecast. On the data font, industrial production and exports for Germany shrank more than anticipated. On the political front, Chancellor Olaf Scholz dismissed his Finance Minister Christian Lindner on Wednesday night, effectively ending the current governing coalition.
The CAC 40 dropped 0.2% to 7,356 on Thursday, marking its second consecutive session of losses and underperforming its European peers, weighed down by notable declines across several stocks. Legrand was the biggest laggard, plunging 6.4% to its lowest level in nearly two months after reporting a decline in both profit and net sales for the first nine months of 2024 compared to the previous year. Teleperformance also saw significant losses, falling 4.2%, despite posting a 3% rise in third-quarter revenue on a pro forma basis, driven by strong demand across sectors. The banking sector was also under pressure, with Credit Agricole dropping 2.4%, BNP Paribas down 0.8%, and Société Générale falling 0.5%. Conversely, ArcelorMittal surged nearly 5% after third-quarter core earnings fell less than expected. Meanwhile, traders continued to assess the potential impact of a Donald Trump presidency, while awaiting key monetary policy decisions from the Federal Reserve and the Bank of England.
