US Tech Surge Lifts Europe Amid Rate Cut Hopes

US rate cut hopes, strong tech gains, and commodity moves kept European markets balanced despite global tensions.

Major European stock indexes held near recent levels on Wednesday as investors parsed a mix of political and economic news. Germany’s DAX index fluctuated below the 24,000-point mark, ending the day marginally in negative territory, despite several negative factors. A government shakeup in France, an Israeli strike targeting Hamas leaders in Qatar, and a reported drone incident over Poland all threatened to unsettle markets. Still, the prevailing focus remained on U.S. monetary policy. Softer-than-expected U.S. inflation data kept hopes alive for Federal Reserve rate cuts. Traders continued to bet on the Fed lowering its benchmark rate next week after August’s producer price index (PPI) showed just modest growth kitco.com. In fact, U.S. producer prices rose only 2.6% year-on-year in August – down from 3.1% in July kitco.com – tempering inflation fears. This data helped calm bond markets and underpinned the idea that rate cuts are coming. U.S. stock markets were mixed on the day: the Dow Jones Industrial Average was roughly 0.2% lower at midday, while technology-heavy indexes were firmer as investors weighed these signals kitco.com.

Tech Stocks and Cloud Optimism

Technology shares outperformed on hopes of stronger growth. In the U.S., Oracle stunned investors with a blockbuster cloud-computing announcement. The company revealed multiple large contracts tied to artificial intelligence workloads, driving its stock up about 43% – a record intraday jump reuters.com. By mid-afternoon, Oracle shares were trading 42.8% higher at $345.49 reuters.com. The surge in Oracle helped lift the Nasdaq Composite by roughly 0.5%. Analysts noted that Oracle’s strength in the AI-driven cloud market has raised expectations for other cloud and software providers. For example, SAP – Europe’s leading enterprise software company – initially saw modest gains amid the positive sentiment. Overall, the tech sector’s rally provided significant support to equity markets even as other sectors were mixed.

Commodities Rise on Geopolitical Tensions

Geopolitical unrest also rippled through commodities markets. Precious metals climbed, with gold hovering near all-time highs as investors sought havens. Spot gold was around $3,644 per ounce by early afternoon, just below Tuesday’s record peak of $3,674 reuters.com. Market watchers attributed this rise to lingering Middle East tensions and the expectation of lower U.S. rates, both bullish for gold. Oil prices likewise ticked higher on security worries. Brent crude traded above $67 a barrel, reflecting concerns over supply disruptions given the Israel–Hamas conflict in the Gulf region. In summary, rising geopolitical risk kept commodities on a firm footing, reinforcing the overall cautious-but-stable tone in markets.

European Corporate Highlights

Among individual companies, Europe saw a mix of analyst moves and strategic plans. In Germany, medical-tech firm Carl Zeiss Meditec drew investor attention after Barclays initiated coverage with an “overweight” (buy) rating and a €52 price target – implying roughly 26% upside – on strong prospects for its eye-care products. The stock jumped about 3.5% on the news investing.com. In contrast, meal-kit provider HelloFresh fell more than 3%. Morgan Stanley downgraded HelloFresh to “equal weight” from overweight and cut its price target to €9 (from €11), warning that rising competition in North America could slow its growth investing.com.

Lufthansa also made headlines. CEO Carsten Spohr told investors that the airline’s turnaround is progressing. He noted that 2025 looks to be a “turning point,” with operations now much more stable. Flight cancellations have fallen to only about 1% of schedules, markedly improving punctuality and customer satisfaction marketscreener.com. Spohr said new organizational measures and fresh aircraft deliveries are helping the company move beyond last year’s disruption.

Other German firms announced corporate actions. IT services group Cancom said it will launch a share buyback program of up to 3.2 million shares (about 10% of its capital) over the next year, aiming to boost shareholder returns marketscreener.com. Cologne-based engine maker Deutz also reiterated its focus on growth by acquisition. The company recently completed a €131 million capital increase to buy drone-engine specialist Sobek, and CEO Sebastian Schulte said this move is part of making Deutz “less dependent on the cyclical combustion engine business” uk.marketscreener.com.

Global Business Updates

Beyond Europe, notable global corporate news emerged. In technology, Apple unveiled its latest iPhone lineup, featuring a new ultra-thin model dubbed the “iPhone 17 Air.” This version uses a high-density battery and a next-generation processor optimized for AI tasks. Apple said the iPhone Air will start at $999 reuters.com. The innovative design – which includes the custom A19 Pro chip tuned for energy efficiency – is widely seen as an attempt to spark sales with a fresh look and advanced features reuters.com.

In healthcare, Danish pharmaceutical giant Novo Nordisk announced a major restructuring. It plans to cut about 9,000 jobs globally (around 11.5% of its workforce) to reduce costs and refocus growth initiatives reuters.com. The move comes amid intense competition in the obesity and diabetes drug markets – notably from U.S. rival Eli Lilly – and follows a series of profit warnings at Novo. Management said the layoffs will help simplify the organization and preserve profitability in the face of slowing demand growth reuters.com.

Finally, in fintech, Sweden’s Klarna completed its much-anticipated New York IPO. The buy-now-pay-later firm raised roughly $1.4 billion by selling shares at $40 each, valuing the company at about $15.1 billion reuters.com. The IPO was among the largest Scandinavian offerings in the U.S., and allowed Klarna’s existing investors to cash in alongside the company’s expansion plans. (Klarna is best known for letting consumers delay payments without interest.)

Each of these developments – from monetary policy to tech earnings and corporate maneuvers – played into Wednesday’s market mood. Analysts noted that, for now, the hopeful outlook on Fed rate cuts and tech-sector strength is helping global stocks hold their ground, even as economic and geopolitical challenges continue to emerge kitco.com reuters.com.

Source:Reuters reuters.com, Marketscreener uk.marketscreener.com, Investing.com investing.com, Kitco News kitco.com