Key Global Events that Can Influence the Stock Market This Week!

Following Fed chair Jerome Powell’s unexpected hawkish comment this week, the global market collapsed like a deck of cards. As expected, the Fed announced a 25 BPS rate cut, bringing the total reduction to one percentage point in 2024. However, it gave a lower forecast for reductions in 2025, which spooked investors worldwide.

Powell stated that the central bank is “going to be cautious about further cuts,” with most Fed officials now seeing two rate cuts in 2025, down from four in September.

At the week’s close, the Dow Jones, S&P 500, and Nasdaq were down 2.23%, 1.99%, and 1.87%, respectively.

European markets, too, witnessed extreme selling pressure following the Fed’s commentary. At the end of the week, the French stock market indexes—TSE and CAC—were down 60% and 1.82%, respectively; the German stock market index was up 64%.

Speaking about the Asian markets, the Indian market was the worst performer in the region, with Nifty 50 declining by more than 4.5% during the week. Japan’s Nikkei 225 was down by 2%, and the Shanghai Composite and Hang Seng were down by 0.70% and 1.25%, respectively. 

What Happened in the Stock Market Globally?

• The Indian market recorded its worst weekly fall in over two years, marking a steep decline since June 2022. All BSE-listed companies experienced a ₹19 lakh crore drop in market capitalization.
  
• The U.S. economy grew at an annualized pace of 3.1% in the third quarter, exceeding a previous estimate of 2.8%, partly due to increased consumer spending.

• As predicted, the Bank of England (BoE) held its key interest rate unchanged at 4.75%. However, due to rising gasoline and apparel expenses, headline annual inflation increased as forecast in November to 2.6% from 2.3% in October.
  
• According to S&P Global’s survey, activity in the eurozone’s private sector closed the year in contraction, while a resurgence in the services sector kept the overall decline to a minimum.
  
• In China, retail sales increased by a lower-than-expected 3% year over year, down from a 4.8% increase in October. Fixed asset investment increased by 3.3% from January to November, below expectations and falling short of the 3.4% increase in the calendar year to October. Property investments, too, declined by 10.4%.

Key Economic Events to Watch in Global Markets in the Upcoming Week

• The UK will release its third-quarter GDP numbers on Monday, December 23rd. According to the Office of National Statistics, the GDP is expected to increase by 0.1%.this
  
• The US will release its November growth numbers for Durable Goods Orders and New Home Sales on December 24th. On December 26th, the country will release its Initial Jobless Claims and Crude Oil Inventories numbers.
  

As 2025 approaches, changing global economic forces continue to impact market sentiment. As markets navigate these challenges, the next economic data releases will be closely monitored for cues about the way forward. As the world approaches 2025, investors must constantly monitor global volatility and make strategic adjustments.

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