Wall Street and European shares ended flat to modestly lower on Monday ahead of a key central bank gathering later in the week that will determine the future path of US interest rate policy. The meeting between Ukrainian President Volodymyr Zelenskiy and US President Donald Trump is expected to shape the country’s security cooperation with Europe.
The S&P 500 index remained close to its all-time high, while the pan-European STOXX 600 index ended slightly higher after reaching a four-year peak last week. However, the MSCI All Country World Index was lower but still near its record high touched on Friday.
US rate futures market has priced in an 85% chance of a quarter-point rate cut at the Federal Reserve’s meeting on September 17. Analysts expect Fed Chair Jerome Powell to signal that risks to employment and inflation are becoming more balanced, which would imply lowering policy rates toward neutral.
The rally in US stocks has been underpinned by a solid earnings season, with the S&P 500 EPS growing 11% on the year. The upcoming results will provide color on consumer spending in the country.
In bond markets, the yield curve steepened, suggesting higher inflation expectations. The dollar dropped 0.3% against a basket of currencies on Monday but rose 0.4% versus the yen to $147.82. Oil prices rose after the meeting between Trump and Zelenskiy, with Brent up 1% at $66.52 a barrel.
The Federal Reserve’s Jackson Hole symposium is set to begin on August 21-23, where Chair Jerome Powell will deliver his economic outlook and policy framework speech.
Source: https://www.reuters.com/world/china/global-markets-wrapup-8-graphics-2025-08-18