The UK stock market saw significant movements this week, with a combination of the Central Bank’s decision to lower interest rates and initial uncertainty around the outcome of the US election. The FTSE 100 is lower on the week, down -1.27% at the time of writing.
The Bank of England’s decision to lower interest rates, cutting them by 0.25% should help support the slowing UK economy.
However, this rate cut was met with investor uncertainty due to the recent budget announcement, which included higher government borrowing and spending, raising concerns about future fiscal stability.
The clear outcome of the US Presidential election paired with a US interest rate cut caused a positive reaction in the US markets with both the S&P 500 (+4.4%) and Nasdaq (6.36%) higher on the week.
This Federal Reserve’s decision to cut interest rates, paired with moderating inflation, provided a boost to investor sentiment, driving stocks upward.
Additionally, October’s jobs report indicated slower employment growth due to labour strikes and hurricane disruptions, reinforcing expectations of further rate cuts.
Gold has generally trended lower this week falling -2.2% to $2,684 per ounce. A strong US Dollar may add downward pressure on gold in the near term.
Oil markets have also experienced fluctuations with Brent crude prices moving slightly lower on the week at around $73.60 dollars a barrel.
While concerns over Middle Eastern conflicts could push prices higher, some traders are speculating that oil could fall if these tensions ease.
The information provided in this communication is not advice or a personal recommendation, and you should not make any investment decisions on the basis of it. If you are unsure of whether an investment is right for you, please seek advice. If you choose to invest, your capital may be at risk and the value of an investment may fall as well as rise in value, so you could get back less than you originally invested.