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A sharper decline may signal waning business investment, potentially weighing on the labor market and consumer spending. These trends could dampen inflation, supporting a more dovish ECB stance. Rising bets on multiple ECB rate cuts could bolster demand for German-listed stocks.
Bets on multiple ECB rate cuts could drive demand for DAX-listed stocks. However, US trade developments remain a key driver for risk assets.
US Markets Rally on Trade Developments
US equities rallied on April 23 amid optimism toward a US-China trade deal. However, Trump’s U-turn on China tariffs led to a late pullback. The Nasdaq Composite Index soared 2.50% on Wednesday, April 23, while the Dow and the S&P 500 posted solid gains of 1.07% and 1.67%, respectively.
US economic indicators had a limited impact on markets despite services sector activity slowing in April. The S&P Global Services PMI fell from 54.4 in March to 51.4 in April. Accounting for around 80% of the US GDP, further weakness in service sector activity may reignite concerns about a potential recession. On April 22, the IMF raised its estimate of a 2025 US recession to 40%, up from 27% in October.
US Jobless Claims, Durable Goods Orders Ahead
Later today, US jobless claims may influence risk sentiment. Economists forecast initial jobless claims to rise from 215k (week ending April 12) to 221k (week ending April 19).
A spike above 250k could fuel speculation about a US recession, impacting risk assets. Conversely, a lower jobless claims print may signal a resilient labor market, bolstering demand for DAX-listed stocks.
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