Global stock markets experienced a downturn on Tuesday, influenced by a decline on Wall Street triggered by a report indicating higher-than-expected spending by American consumers. This surge in spending suggests a robust U.S. economy, potentially preventing a significant drop in inflation that could prompt the Federal Reserve to consider cutting interest rates. The resulting high interest rates and bond yields have negatively impacted various investment sectors.
In Europe, major indices such as Germany's DAX, France's CAC 40, and the UK's FTSE 100 all recorded losses. Meanwhile, China, the world's second-largest economy, reported a surprisingly rapid 5.3% annual growth rate in the first quarter, although signs of economic slowdown emerged in March, including declining house prices and weakened industrial output.
Asian markets also faced declines, with the Shanghai Composite, Hang Seng in Hong Kong, and Tokyo's Nikkei 225 all experiencing losses. The dollar continued to strengthen against the Japanese yen, reaching a 34-year high. The euro remained stable against the dollar.
Elsewhere in Asia, Taiwan's Taiex and South Korea's Kospi witnessed significant declines, while Australia's S&P/ASX 200 also fell. The recent market volatility has been attributed to conflicting factors such as increased consumer spending and economic growth, which raise hopes for improved corporate profitability but also dampen expectations for interest rate cuts by the Federal Reserve.
In the oil market, U.S. crude for May delivery and Brent crude both experienced slight declines in prices. Concerns have been raised about the impact of rising oil prices on inflation, which has remained stubbornly high this year, consistently surpassing forecasts in each month of 2024.
