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European stocks drop after recent record-highs; gold remains above $4,000

Investors weighed the risks of a correction in the market after AI-enthusiasm pushed Asian stocks to new highs over night.

Wall Street hit fresh

Record highs

Investors bet on technology stocks to gain in the previous session despite the U.S. shutdown, which left traders without key

Economic data

Investors have been nervous about the U.S. government shutdown, political risks in Japan, and France this week. This has created a safe-haven market, which along with a weaker US dollar, has pushed gold to $4,000 for first time.

STOXX Down 0.3% On The Day

At 0903 GMT, the STOXX 600 index was down by 0.3% and London's FTSE 100 fell 0.3%.

Losses

Lloyds Banking Group

Gains in mining and technology shares partially offset gains.

The MSCI World Equity Index remained flat for the day.

Fiona Cincotta is the senior analyst for City Index.

"We don't get the data we need from the U.S., so it feels like we are missing out on any substance in our movements."

Jamie Dimon, CEO of JPMorgan Chase, has expressed his concern about the increasing caution among investors.

There was an increased risk of a significant stock market correction in the U.S. within the next 6 months to 2 years.

Donald Trump, President of the United States

Israel and Hamas reached an agreement late Wednesday evening

Stopfire and hostage negotiation

The French bond market held onto Wednesday's gains, after President Emmanuel Macron announced that he will name a new Prime Minister by Friday night.

Raising Hopes

The country would be able to avoid an election by announcing a budget and avoiding a snap vote.

The benchmark German 10-year bond yield is 2.692%, while the 10-year French government bonds yield is 3.5082%.

dollar

Index made modest gains. It was up 0.1% for the day, at 99.971, though still down 8.9% overall. The euro is in its fourth consecutive day of declines. It was down by 0.1% to $1.1615.

Overnight, the Japanese yen fell to an eight-month low at 153 per dollar. However, it was still a little stronger than that at 152.76.

Sanae Takaichi, the likely new Japanese premier, is advised by an economist in her policy circle

The current weakness of the yen is beneficial to the economy and can be offset with aggressive fiscal spending.

The oil prices were stable as traders waited for the outcome of the elections.

Stopfire and hostage negotiation

Between Israel and Hamas, the agreement would be held.

Gold is still at $4,041.29.

Kristalina Georgeva, Managing Director of the International Monetary Fund on Wednesday

Forecast

Investors are warned not to become complacent, as there will be a slight decline in growth globally in 2025 and in 2026. However, the world economy is more resilient than anticipated.

tightened

Export controls on rare earth technologies are being expanded by the government.

(source: Reuters)