Weak US stock markets drag down Swiss market

The gloomy mood on Wall Street has spilled over onto the Swiss market. Keystone-SDA

The Swiss stock market came under significant pressure in early trading on Wednesday. The gloomy mood on Wall Street from the previous day spilled over onto the local stock market.

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The US stock markets had started September with weak prices the previous day after a public holiday. In particular, a poor ISM index – an important leading indicator for industry – led to losses. In addition, the market is noticeably cautious ahead of the publication of the US labour market report on Friday. This will set the tone for the Fed’s interest rate cut expectations.

“Many warnings have been ignored and the markets have overshot the mark,” said one market observer. The mood is in danger of tipping: it now remains to be seen how the US jobs data turns out and what the Fed’s most likely reaction will then be in mid-September.

The market is expecting an interest rate cut. The question is how big the move will be. For the time being, however, weak data is primarily fuelling concerns about a US recession, and interest rate cuts are not a “panacea”, according to traders.

The US technology exchange Nasdaq in particular suffered heavy losses on Tuesday due to a slide in semiconductor stocks. The shares of industry giant and AI flagship company Nvidia plummeted by almost 10%.

The most important Asian trading centres were also dominated by significant losses in the middle of the week. The slide in the Japanese Nikkei 225 in particular brought back memories of the global market slump at the beginning of August. At that time, however, they quickly recovered and have since more than made up for these losses.

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The Swiss Market Index (SMI) lost 1.2% to 12,206 points at around 9.35am. With the exception of Swiss Life (+0.2%), all stocks in the leading Swiss index are weaker.

In the broad market, technology stocks such as VAT (-3.8%), Inficon (-2.1%) and Comet (-2.7%) were particularly hard hit. At Logitech (-1.4%), the power struggle between the company’s founder Daniel Borel and the Chairman of the Board of Directors Wendy Becker with the Annual General Meeting on Wednesday afternoon added to this.

Translated from German by DeepL/ts

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