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European Markets Poised for Mixed Opening Amid Global Economic Optimism

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European stock markets are set to open the new trading week with mixed results, following a global rally last week that saw stocks rebound from recent volatility. The U.K.’s FTSE 100 is projected to open 11 points lower at 8,299, while Germany’s DAX is expected to drop 13 points to 18,314. Conversely, France’s CAC 40 is anticipated to rise by 10 points to 7,454, and Italy’s FTSE MIB is forecasted to gain 58 points, opening at 33,195, according to data from IG.

This comes after European markets closed on a high note last Friday, capping off a positive week for global stocks. U.S. markets also ended the week strong, buoyed by encouraging jobless claims and retail sales data, which eased investor concerns about a potential recession.

In the Asia-Pacific region, markets were mixed as investors braced for a week packed with central bank updates and key inflation data. Meanwhile, U.S. stock futures ticked up slightly in overnight trading.

This week, Wall Street will closely watch Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday for insights into the future of interest rate policy. The minutes from the Fed’s latest meeting, set to be released on Wednesday, are also highly anticipated.

With no major earnings reports expected on Monday, investors will focus on economic data, including Spain’s latest balance of trade figures.

Indexes End with Strong Gains, Rebounding from Global Market Rout

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U.S. stocks ended sharply higher on Tuesday, with investors returning to the market after a dramatic sell-off. Recent comments by Federal Reserve officials eased worries about a U.S. recession. All major S&P 500 sectors saw significant gains. Federal Reserve policymakers dismissed the notion that weaker-than-expected July jobs data indicated an impending recession. However, they cautioned that the Fed might need to cut interest rates to avoid such an outcome. Nvidia (NVDA.O) was the biggest contributor to the gains in the S&P 500 and Nasdaq.

“The market had just gotten top heavy, but it did reprice a decent amount, particularly the Nasdaq, and people are coming back to the idea that with lower rates, it should provide support for stocks,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. According to preliminary data, the S&P 500 (.SPX) gained 51.66 points, or 1.00%, to end at 5,237.99 points, while the Nasdaq Composite (.IXIC) gained 166.77 points, or 1.03%, to 16,366.86. The Dow Jones Industrial Average (.DJI) rose 284.86 points, or 0.74%, to 38,988.13.

Traders are now pricing in a 75% chance that the Fed will cut rates by 50 basis points at its next policy meeting in September, and a 25% chance of a 25 basis point reduction, according to the CME Group’s FedWatch Tool. Stocks had sold off after weak economic data raised concerns about a U.S. recession. These concerns were exacerbated as investors unwound yen-funded trades, which had been used to finance stock acquisitions for years, following a surprise Bank of Japan rate hike last week.

The next major Fed event is Chair Jerome Powell’s speech at Jackson Hole on August 22-24. Uber (UBER.N) shares rose sharply after the ride-sharing and food delivery provider exceeded Wall Street estimates for second-quarter revenue and core profit, driven by steady demand for its services. Caterpillar (CAT.N) also gained after surpassing analysts’ estimates for second-quarter profit, as higher prices on its larger excavators and other equipment offset moderating demand in North America.