Berliner Tageszeitung - Stocks, dollar hesitant as traders scale back US rate cut bets

Global equity markets have cooled since Trump's US election win this month, while investor attention has turned to his coming pick for Treasury secretary.

All three main indices on Wall Street ended deep in the red Friday, with the Nasdaq down more than two percent, after Federal Reserve boss Jerome Powell signalled a slower pace of interest rate cuts.

European markets tracked those losses Monday while US stocks opened mixed, with most eyes fixed on quarterly earnings from chip behemoth Nvidia on Wednesday.

"The generative AI chip giant... has the potential to influence markets substantially" given its outsize weight in all US indices, said David Morrison, senior analyst at Trade Nation.

He added that data showing US inflation is proving sticky even before any potential uplift to prices if Trump follows through on tariff threats and other policies once he re-enters the White House in January.

The Fed's next policy decision in December will be closely followed for an idea about officials' plans.

"Although the markets are still pricing in a cut for December, the rate of reductions for next year has now slowed significantly," said Richard Hunter, head of markets at Interactive Investor.

Expectations that a second Trump administration will impose painful fresh tariffs on Chinese goods has added to the unease and ramped up fears of another trade war between the economic powerhouses.

"It is likely that if Trump does proceed with tariffs on Chinese goods, they will respond aggressively," said Kathleen Brooks, research director at traders XTB.

In Europe, the vice president of the European Central Bank said Monday that Trump's spending plans risked inflating the US government's budgetary deficit and spreading worries on markets.

"Trade tensions could rise further," with resulting risks for economic activity, Luis de Guindos noted.

Investor focus this week will be on also the release of purchasing managers' index data for signals about the health of business activity in the eurozone, Britain and United States.

Friday's PMI data "may capture some of the initial sentiment impact from around the world regarding Trump's victory," said Jim Reid, economist at Deutsche Bank.

"Europe will be especially interesting on this front as the continent awaits their trade fate," he added.

In Asia on Monday, Tokyo and Shanghai stock markets closed lower and Hong Kong rose.

Shares in Hong Kong were helped by hopes for more Chinese stimulus after a recent raft of measures, while a call by authorities for firms to step up efforts to boost shareholder returns also provided support.

Bitcoin sat around $91,900, having hit another record high of $93,462 last week on hopes Trump would push for more deregulation of the crypto market.

- Key figures around 1440 GMT -

New York - Dow: DOWN 0.1 percent at 43, 395.72

New York - S&P 500: FLAT at 5,871.67

New York - Nasdaq: UP 0.1 percent at 18,702.03

London - FTSE 100: UP 0.3 percent at 8,086.94

Paris - CAC 40: DOWN 0.2 percent at 7,257.74

Frankfurt - DAX: DOWN 0.4 percent at 19,141.86

Tokyo - Nikkei 225: DOWN 1.1 percent at 38,220.85 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 19,576.61 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,323.85 (close)

Euro/dollar: UP at $1.0571 from $1.0536 on Friday

Pound/dollar: UP at $1.2630 from $1.2611

Dollar/yen: UP at 154.92 yen from 154.32 yen

Euro/pound: UP at 83.71 pence from 83.52 pence

Brent North Sea Crude: UP 1.2 percent at $72.21 per barrel

West Texas Intermediate: UP 1.1 percent at $68.05 per barrel

Y. Rousseau--BTZ