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04/06/24 Briefing

Growth in the US services sector comes amid signs of a cooling US jobs market which helped boost markets. The FTSE was higher on Wednesday. (Richard Levine)

Wall Street followed the the FTSE 100 (^FTSE) and European stocks higher on Wednesday as the US services sector returned to growth in May.

This was after economic activity contracted marginally in April for the first time since December 2022.

In the latest services Report On Business from the Institute for Supply Management, the headline reading was 53.8 in May, up from 49.4 in April. The 50 mark divides expansion from contraction.

It came amid signs of a cooling US jobs market helped boost markets on Tuesday. Traders are now more optimistic on interest rate cuts later this year. Data on Tuesday revealed that job openings plunged to their lowest in over three years, reinforcing predictions of a rate cut by the Federal Reserve in September.

Meanwhile, the European Central Bank (ECB) is expected to announce its first interest rate cut in five years on Thursday, reducing its deposit rate from record highs of 4% to 3.75%.

  • London’s benchmark index was almost 0.2% higher as risk appetite continued to grow.

  • Germany's DAX (^GDAXI) gained 0.8% and the CAC (^FCHI) in Paris headed 0.8% into the green.

  • The pan-European STOXX 600 (^STOXX) was up 0.7% led higher by all sectors, with top performers among tech and utility shares.

  • Wall Street opened higher as tech giant Google faces £13.6bn legal claim over advertising tech

  • The pound was trading 0.1% up against the dollar (GBPUSD=X) at 1.2780.

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