European markets have rallied through November, supported by cooling U.S. economic data and increasingly dovish signals from the Federal Reserve, which boosted expectations of a rate cut next month. Optimism over renewed diplomatic movement on Russia-Ukraine ceasefire talks has also eased geopolitical anxiety, helping extend Europe’s longest market winning streak since early 2024.
What’s Happening Now
European shares edged slightly lower on Friday, with the STOXX 600 down 0.1% but still on track for strong weekly gains and a fifth consecutive positive month. Bank stocks weighed on the index amid a Milan investigation into Monte dei Paschi di Siena, while commodity-linked shares rose in line with firmer oil and metal prices.
Investors turned cautious ahead of the weekend and a shortened U.S. trading session, with analysts noting a rare moment of “calm” in markets after weeks of volatility driven by tech-sector valuations.
Why It Matters
The shift in market mood reflects easing fears of an AI-driven asset bubble and increasing confidence that monetary policy will soon loosen. A potential Federal Reserve rate cut would support global liquidity and risk assets, while progress toward Russia-Ukraine peace talks could reduce geopolitical uncertainty for European firms.
A temporary trading outage at CME Group has also caught investor attention, impacting activity in key currency and futures markets.
What’s Next
Focus now turns to next week’s Russia-Ukraine negotiations, as Kyiv signals openness to a deal framework but insists major issues are unresolved. Markets will also monitor whether the Fed maintains its dovish tone ahead of its December policy meeting.
Corporate movements, including investor pressure on Delivery Hero to consider asset sales and JP Morgan’s upgrade of Ferragamo, may further influence sector-specific momentum.
With information from Reuters.
