Global Markets Slide in Europe as Gold and Silver Surge Ahead of Federal Reserve Decision

By Anietie Anii-Bassey

European stock markets drifted lower Wednesday following a mixed session across Asia, while precious metals surged sharply as investors positioned themselves ahead of a closely watched interest rate announcement from the U.S. Federal Reserve later in the day.

Germany’s DAX slipped 0.2% to 24,837.57, France’s CAC 40 fell 1.1% to 8,065.62 and Britain’s FTSE 100 eased 0.2% to 10,188.28, reflecting caution among traders as they weighed currency swings, geopolitical risks and the outlook for monetary policy in the United States. Futures for Wall Street pointed to a steadier open, with contracts tied to the S&P 500 up 0.3% and those linked to the Dow Jones Industrial Average little changed.

In Asia, markets were more buoyant, led by South Korea, where technology stocks powered the benchmark Kospi to a record close. Shares of chipmaker SK Hynix jumped 5.1%, helping lift the index 1.7% to 5,170.81 as investors bet on continued demand for artificial intelligence hardware and advanced semiconductors.

Japan’s Nikkei 225 reversed early losses to finish marginally higher at 53,358.71. Energy and technology conglomerate SoftBank Group gained 3.7% after reports it plans to increase its investment in OpenAI, giving the broader market a late boost despite ongoing concerns about currency volatility.

The U.S. dollar rebounded modestly against the Japanese yen, trading at 152.68 yen compared with 152.19 yen earlier, but it remained sharply weaker than a week ago.

The greenback has fallen nearly 4% from recent highs near 160 yen, levels that previously triggered warnings from Japanese and U.S. officials about possible intervention to stem the currency’s slide. A weaker dollar tends to pressure major Japanese exporters by eroding the value of overseas earnings, adding another layer of uncertainty for investors.

Against the euro, the dollar also lost ground, with the single currency easing slightly to $1.1983 from $1.2041 late Monday but still hovering near multi-year highs. A widely followed index tracking the dollar’s performance against a basket of major currencies has dropped to its lowest level since 2022, underscoring how quickly sentiment has shifted in global foreign-exchange markets.

That retreat from the dollar has helped propel precious metals to extraordinary levels. Gold prices leapt 3.9% to $5,279.30 an ounce, while silver surged an even more dramatic 6.7% to $112.69. Investors, including several central banks, have been trimming their holdings of U.S. assets and moving funds into metals that are traditionally viewed as safe havens during periods of political and financial uncertainty.

Elsewhere in Asia, Hong Kong’s Hang Seng climbed 2.6% to 27,826.91, buoyed by broad buying across financial and technology stocks. Mainland China’s Shanghai Composite added 0.3% to 4,151.24. Taiwan’s Taiex advanced 1.5%, while India’s Sensex posted a modest 0.3% gain.

Overnight in the United States, stocks were choppy as investors digested a mixed batch of corporate earnings. The S&P 500 rose 0.4% to 6,978.60, edging past a previous record set earlier this month. The Dow Jones Industrial Average slipped 0.8% to 49,003.41, weighed down by losses in health-care and industrial shares, while the Nasdaq composite climbed 0.9% to 23,817.10 thanks to strength in major technology companies.

Attention is now turning to a packed earnings calendar later this week, with heavyweight firms including Meta Platforms, Microsoft and Tesla set to report results Wednesday, followed by Apple on Thursday. Their performance will be scrutinized for clues about whether corporate profit growth can justify lofty stock valuations after months of relentless gains.

Currency moves and political developments have added to the volatility. The dollar’s recent slide accelerated after President Donald Trump threatened tariffs on several European nations he accused of opposing his efforts to take control of Greenland, remarks that unsettled investors and revived concerns about escalating trade tensions.

Combined with worries about the size of U.S. government debt, those factors have periodically driven international funds away from American markets in what some analysts describe as a renewed “Sell America” trade.

Economic data released Tuesday added to the uneasy mood. A survey from the Conference Board showed U.S. consumer confidence weakened sharply last month, falling to its lowest level since 2014 and below readings seen during the pandemic, defying expectations for a modest rebound. The report suggested households are increasingly concerned about inflation, interest rates and the broader economic outlook.

Inflation remains stubbornly above the Federal Reserve’s 2% target, complicating the central bank’s path forward. While lower rates could provide a boost to economic growth and financial markets, they also risk reigniting price pressures. Most traders expect policymakers to hold borrowing costs steady for now and resume rate cuts later in the year if inflation shows clearer signs of cooling.

For companies, the stakes are high. With stock prices hovering near record levels, investors are demanding strong profit growth to justify valuations. Over the long run, share prices tend to track earnings, and analysts say corporate results will need to continue improving to counter criticism that markets have become overstretched.

In energy trading early Wednesday, U.S. benchmark crude oil edged up 1 cent to $62.40 a barrel, while Brent crude, the international benchmark, slipped 9 cents to $66.50, as traders balanced supply concerns with expectations for global demand growth.