US and European shares nudged higher Monday as momentum from last week was restrained by weaker eurozone economic data. Stock markets rallied after the US Federal Reserve on Wednesday announced a bumper interest rate cut, its first since 2020, as inflation continued to cool toward its long-term target of two percent. On Wall Street, the Dow and the broad-based S&P 500 hit fresh records, extending a positive stretch in anticipation of further central bank easing in the months ahead.
Easing monetary policy is "supportive for equities," said LBBW's Karl Haeling, who expects US officials could accelerate rate cuts if the labor market weakens. London and Paris closed slightly higher Monday, while Frankfurt gained a healthier 0.7 percent.
Friday's upcoming release of the personal consumption expenditures index -- the Fed's preferred inflation metric -- could shed light on the bank's next rate move, as could several planned speeches this week by senior Fed officials. Speaking on Monday, Atlanta Fed president Raphael Bostic said the US central bank's rate decision last week left it in a strong position, whichever way the economic winds blow in the coming months. "In my view, the 50-basis-point adjustment at the meeting last week positions us well should the risks to our mandates turn out to be less balanced than I am thinking," said Bostic, one of 12 voting members on the Fed's rate-setting committee this year.
"If my optimism about inflation is unsatisfied, then the Committee can sl.