Q3 2024 presented a mixed but eventful quarter for both European and U.S. equity markets, with significant monetary policy interventions and sector-specific performance patterns. In both regions, interest rate cuts were the key drivers of market activity, as central banks moved to counter economic challenges. While the U.S. market maintained its upward momentum, Europe saw more subdued growth due to lingering economic pressures, particularly in manufacturing.
Click here for full PDF: Rate Cuts and Resilience U.S. and European Equity Markets in Q3 2024
Monetary Policy:
Europe: The European Central Bank (ECB) implemented its second rate cut of 2024, lowering rates to 3.65% in September, while the Bank of England also reduced rates by 25 basis points in August. These moves aimed to support weakening economies across the region, though inflation proved more persistent than anticipated. The rate cuts provided some relief to equities, but economic growth remained sluggish.
U.S.: In the U.S., the Federal Reserve made a more aggressive move, cutting interest rates by 50 basis points in September. This was part of an anticipated easing cycle, initiated in response to weaker labor market data and concerns about a potential economic slowdown. The cut helped restore market confidence, allowing the S&P 500 to reach record highs by the end of the quarter.
Conclusion:
Q3 2024 was a period of stabilization and cautious optimism for both European and U.S. equity markets. While Europe faced more economic headwinds, especially in manufacturing, the U.S. enjoyed a stronger performance, driven by aggressive monetary easing and sector-specific resilience. Both markets will likely continue to rely on central bank support and improving global conditions to navigate ongoing uncertainties.
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