Swiss stock market dips after Fed interest rate statements
Published: Thursday, Dec 19th 2024, 11:10
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The Swiss stock market plummeted in early trading on Thursday. The reason for this was negative guidance from the USA. There, the Fed caught investors on the wrong foot.
As expected, the Fed has lowered the key interest rate by a further 0.25 percentage points. However, the US central bank predicted fewer interest rate cuts than before for the coming year due to stubbornly high inflation. This caused share prices on Wall Street and especially on the Nasdaq technology exchange to plummet.
The Fed may have spoiled this year's Christmas rally, as its hawkish change of course could trigger a deeper correction on the US equity markets, according to a Swissquote commentary.
Following the US interest rate decision, the next market-moving event is the big expiry day at Eurex on Friday. Futures and options on indices and individual shares expire at the end of the year. This can lead to heavy price fluctuations with high turnover.
These often have the effect of reinforcing the trend. "This means that the very last hopes of a year-end spurt have probably evaporated," said another market participant.
Tech stocks plummet
The leading SMI index fell by 1.3 percent to 11,488 points in the first hour of trading. All stocks in the leading index fell. The Swiss stock exchange was not alone in this: The other major European stock exchanges were also clearly in the red.
Investor uncertainty is also reflected in the VSMI volatility index. The fear barometer rose by double digits.
Technology stocks VAT, Logitech and AMS Osram were under heavy pressure, with share prices falling by between 2.8 and 5 percent. The reason for this was the weak US technology exchange Nasdaq, which had slumped by 3.6 percent the previous evening.
At the bottom of the rankings, SoftwareOne's billion-euro takeover in Norway caused its share price to jump by +6.7 percent.
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