Markets caught offside by White House announcement

Once again dip buyers have jumped in to avert a wider selloff, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

Stocks rebound from their lows

Markets often see a burst of volatility after US holidays, but today seemed to have something more about it, as European markets nose dived in early trading and bond yields continued to rise. The start of the US cash session saw a recovery off the lows, a sign that dip buyers remain vigilant for any chance to get in on the action. A seemingly cryptic announcement from the White House was revealed to be merely an update on Space Command, at which point any wild fears about the health of the US president were quietly dropped.

Dax endures steep losses

One index that didn’t rebound this afternoon was the Dax, which slumped following Fresenius’ sale of its Canadian business, and then took a further knock as eurozone inflation rose. The ECB’s Schnabel didn’t help matters, arguing that further rate cuts were unnecessary. European stocks have enjoyed a brief moment in the sun this year, but as the Fed moves towards rate cuts we might see this wave of fund flows head back to Wall Street and the allure of high growth stocks over their cheap but staid European cousins.