Global stocks mostly fall, bitcoin soars to new peak

This illustration photograph taken on November 22, 2024 in Istanbul shows physical banknotes and coin imitations of the Bitcoin crypto currency. (Photo by Ozan KOSE / AFP)

New York, United States — Global shares mostly retreated Monday as markets awaited a Federal Reserve interest rate decision while concerns over political battles in Europe and China’s struggling economy pressured equities.

The Nasdaq was the day’s outperformer, surging more than one percent to a fresh all-time high behind big gains for Broadcom, Google-parent Alphabet and other tech names.

But the Dow fell, along with bourses in Europe and Asia as traders fretted over political instability in France and Germany.

READ: Bitcoin hits $100,000 for first time

Bitcoin, meanwhile, hit a new record high, reaching $107,115.89 as it continues to gain support from Donald Trump’s backing of cryptocurrencies.

Investors are turning their attention to Wednesday’s US Federal Reserve decision on borrowing costs at its last policy meeting of the year before Trump takes office next month.

The Fed is widely expected to cut its key lending rate for a third straight time, reducing it by a quarter point despite a recent uptick in inflation.

But there are fears it will have to slow its pace of easing next year owing to sticky inflation and bets that Trump’s tax cuts and tariffs will reignite price increases.

Kathleen Brooks, research director at trading platform XTB, said that there would be “an elephant in the room” at the Fed meeting.

“How to accurately forecast economic activity and inflation rates, when the President-elect’s policies are expected to have a huge economic impact and could trigger more inflation?” she wrote.

China and Europe worries

Investors also tracked data showing that Chinese retail sales grew 3.0 percent last month, much slower than in October and well off the five percent forecast.

Hong Kong and Shanghai stock markets closed lower after the data release while oil prices fell slightly on concerns over Chinese demand.

Chinese officials have unveiled a string of aggressive measures in recent months aimed at bolstering growth in the world’s second-biggest economy.

In Europe, the Paris stock market fell 0.7 percent after Moody’s downgraded France’s credit rating Saturday following months of political crisis and the appointment of centrist Francois Bayrou as prime minister.

“The market is likely to watch closely to see how the political problems in France affect sentiment in the German economy,” said Jochen Stanzl, an analyst at CMC Markets.

Frankfurt slid 0.5 percent as Germany’s embattled center-left Chancellor Olaf Scholz lost a confidence vote, triggering elections set for February 23.

The European Central Bank cut rates again last week as inflation appears to come under control and the eurozone economy shows signs of weakness.

ECB chief Christine Lagarde said Monday that the bank would keep lowering interest rates, while warning that higher US tariffs under Trump could hit growth in the bloc.

A closely watched survey released Monday showed that business activity declined further in the eurozone in December, though less sharply than the previous month thanks to an upturn in the services sector.

Key figures around 2210 GMT

New York – Dow: DOWN 0.3 percent at 43,717.48 (close)

New York – S&P 500: UP 0.4 percent at 6,074.08 (close)

New York – Nasdaq: UP 1.2 percent at 20,173.89 (close)

Paris – CAC 40: DOWN 0.7 percent at 7,357.08 (close)

Frankfurt – DAX: DOWN 0.5 percent at 20,313.81 (close)

London – FTSE 100: DOWN 0.5 percent at 8,262.05 (close)

Tokyo – Nikkei 225: FLAT at 39,457.49 (close)

Hong Kong – Hang Seng Index: DOWN 0.9 percent at 19,795.49 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,386.33 (close)

Euro/dollar: UP at $1.0509 from $1.0501 from Friday

Pound/dollar: UP at $1.2678 from $1.2619

Dollar/yen: UP at 154.13 yen from 153.65 yen

Euro/pound: DOWN at 82.86 pence from 83.22 pence

West Texas Intermediate: DOWN 0.8 percent at $70.71 per barrel

Brent North Sea Crude: DOWN 0.8 percent at $73.91 per barrel