Global Markets Wobble Amid U.S. Credit Downgrade and China Economic Concerns
European stocks fell after a U.S. credit rating downgrade and weak Chinese economic data. U.S. stocks also dropped, influenced by Moody's negative rating and fiscal worries. Despite recent market recovery, global caution prevails due to uncertainties in U.S. policies, EU-UK ties, and China's economy impacting luxury goods.
Amidst a five-week winning streak, European stocks took a downturn on Monday due to a U.S. credit rating downgrade and weak economic indicators from China, unsettling investor confidence. The pan-European STOXX 600 index saw a 0.7% decline by 0913 GMT, pulling back from seven-week highs achieved last Friday.
The drop in U.S. stock index futures, surpassing 1%, and the rise in longer-dated U.S. Treasury yields came after Moody's downgraded its credit rating on Friday, expressing concern over the escalating $36 trillion debt. Political maneuvers including President Trump's tax cut bill, finally approved by a congressional committee after internal Republican debates, further fueled fiscal uncertainties.
Global market unease was evident as Asian and European stocks fell while safe-haven gold prices went up. The apprehension stems from Trump's unpredictable policy shifts and ongoing tariff negotiations, particularly with China. Meanwhile, a landmark EU-UK agreement on trade and defense cooperation, revived by recent developments, awaits finalization at a major summit.
(With inputs from agencies.)
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