US, European stock markets show resilience amid recession fears

(MENAFN) Yesterday, U.S. stocks began to recover from the recession fears that had impacted both domestic and global markets the day before. The recovery was driven by a surge in technology stocks, including Nvidia, Meta, and Apple, alongside reassuring statements from U.S. Federal Reserve officials. The Dow Jones Industrial Average climbed by 550 points, or 1.5 percent, while the Nasdaq Composite increased by 370 points, or 2.3 percent. Additionally, the S&P 500 rose by about 100 points, or 2 percent, following its worst single-day performance in nearly two years.

The recovery in U.S. stock index futures was bolstered by positive remarks from Federal Reserve officials, which helped lift market sentiment and encouraged investors to seek buying opportunities after the previous session's significant decline. The recovery was marked by gains in the stocks of major companies that had collectively lost USD200 billion in market value the day before.

Federal Reserve policymakers emphasized that weaker-than-expected employment data for July did not indicate a severe economic downturn, but they did acknowledge the need for potential interest rate cuts to prevent such an outcome. Shares of Nvidia and Apple each rose by 2.6 percent, while Meta saw a 1 percent increase. Some investors now perceive the prior sell-off as an overdue correction in a market that had reached new valuation peaks, though others caution that further declines could still occur.

In Europe, stocks rebounded after hitting a six-month low in the previous session, mirroring a recovery in Asian markets and receiving support from a series of corporate earnings reports. The pan-European STOXX 600 index increased by 0.29 percent during trading, following its sharpest three-day decline since June 2022. Despite closing below the 500-point level for a second consecutive day, the index showed signs of stabilization. Germany's DAX index rose by 0.22 percent, and the UK's FTSE 100 added 0.24 percent, while France's CAC 40 index slightly fell by 0.23 percent. The travel sub-index led the sectoral gains, driven by a 2.1 percent rise in InterContinental Hotels Group shares after the company, which owns Holiday Inn, reported strong second-quarter results.

Online clothing retailer Zalando's shares surged by 4 percent following an 18.5 percent increase in operating profit for the second quarter. These gains underscore the resilience of European markets, despite the recent volatility and ongoing economic uncertainties.

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