Stocks gain as hopes rise for Russia-Ukraine truce: Markets Wrap

by Robert Brand

Stocks gained after the Kremlin confirmed Presidents Vladimir Putin and Donald Trump will meet for summit talks within the next few days, raising hopes of a truce in Russia’s war with Ukraine.

The Stoxx Europe 600 benchmark advanced more than 0.8%, on track to wipe out losses sparked by last week’s dismal US jobs data. The travel and leisure sector outperformed. A basket of stocks exposed to Ukraine rose, while defense shares dropped. Upbeat earnings from some of the region’s biggest companies helped boost sentiment, even after German industrial production suffered its biggest drop in almost a year in another setback for Europe’s largest economy.

“A Russia-Ukraine peace deal should be positive for European consumers and risk sentiment and negative for oil prices,” said Mohit Kumar, chief economist and strategist at Jefferies International Ltd. “Sectors to benefit should be European consumers, growth-sensitive and construction-related sectors.”

Futures on the S&P 500 and Nasdaq 100 added 0.7%. A gauge of the dollar declined for a fifth day, the longest streak in almost four months, while the euro rose to a session high. The 10-year Treasury yield dipped. Crude oil pared gains.

Market sentiment got a boost earlier after President Donald Trump announced that companies producing goods in the US, such as Apple Inc., would be eligible for exemptions from his proposed 100% tariff on chip imports. Increasing speculation on a Federal Reserve interest-rate cut are also supporting optimism in stocks as sweeping new tariffs to reshape global trade officially took hold Thursday.

Investors are also contending with a busy slate of earnings. Among companies that reported on Thursday:

• German defense company Rheinmetall AG slumped after missing analysts’ estimates for operating profit as orders from increased German and broader European defense spending have yet to materialize.
• Deutsche Telekom AG fell after reporting second-quarter earnings that included a weakening performance in Germany, its biggest market.
• Siemens AG’s shares rose after revenue and orders increased in its fiscal third quarter.
• Allianz SE, the German insurer that owns bond manager Pacific Investment Management Co., climbed after second-quarter profit rose amid better results in its property-casualty insurance segment and inflows at Pimco.
• Shares in A. P. Moller-Maersk A/S, a bellwether for world trade, gained after it raised its financial outlook for 2025, saying demand outside North America is “resilient” even amid concerns over a trade war.
• Sandoz Group AG rose after the Swiss pharmaceutical company posted an earnings beat.

Trump said the US would charge “a tariff of approximately 100% on chips and semiconductors,” late Wednesday in the US. He added “but if you’re building in the United States of America, there’s no charge.” The comments came as Apple Chief Executive Officer Tim Cook unveiled a $100 billion US investment plan alongside Trump in the Oval Office.

Later Thursday, the Bank of England is expected to cut rates. The pound edged higher against the dollar, while the UK’s benchmark stock index fell.

Meanwhile, three Fed policymakers voiced concerns about the US labor market Wednesday with remarks that pointed to a potential interest-rate cut in September. Fed San Francisco President Mary Daly said policymakers will probably need to adjust interest rates in “coming months” to prevent a further deterioration in hiring.

Data published last week pointed to a sharp cooling in the labor market over the last few months. Policymakers left rates unchanged at the end of July and next meet in September. They have two more meetings after that in 2025.

Traders are awaiting data later Thursday on weekly unemployment claims for more clues on the health of the US jobs market.

Separately, Trump indicated he would likely nominate a temporary Fed governor to fill the soon-to-be vacant seat on the central bank’s board within the coming days, rather than use the seat to signal his choice to replace Jerome Powell as chairman.

Elsewhere, China’s export growth unexpectedly accelerated last month in the fastest gain since April. The resilience in overseas shipments came despite the high tariffs imposed by the US. Chinese shares were flat.

In other tariff news, the US also imposed an additional 25% levy on Indian goods, effectively doubling the rate announced days earlier. Indian shares fell for a third day. The rupee depreciated.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.8% as of 10:45 a.m. London time
• S&P 500 futures rose 0.7%
• Nasdaq 100 futures rose 0.7%
• Futures on the Dow Jones Industrial Average rose 0.5%
• The MSCI Asia Pacific Index rose 1%
• The MSCI Emerging Markets Index rose 1.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.1% to $1.1677
• The Japanese yen was little changed at 147.27 per dollar
• The offshore yuan was little changed at 7.1799 per dollar
• The British pound was little changed at $1.3369

Cryptocurrencies

• Bitcoin was little changed at $115,031.76
• Ether rose 1.4% to $3,728.73

Bonds

• The yield on 10-year Treasuries was little changed at 4.23%
• Germany’s 10-year yield declined one basis point to 2.64%
• Britain’s 10-year yield was little changed at 4.52%

Commodities

• Brent crude rose 0.3% to $67.11 a barrel
• Spot gold rose 0.3% to $3,380.08 an ounce

This story was produced with the assistance of Bloomberg Automation.

Copyright Bloomberg News