European Markets Rise as Swiss Central Bank Holds Rates at 0% Amid Cooling Inflation

European stocks closed higher on Thursday as investors weighed the U.S. Federal Reserve’s latest rate cut and the Swiss National Bank’s decision to keep interest rates unchanged. The Stoxx 600 rose 0.5%, with most major European indexes holding steady or posting modest gains. The upbeat finish came despite lingering global uncertainties that have defined this year’s market landscape.

Switzerland’s central bank left its benchmark interest rate at 0%, citing inflation that has cooled faster than expected. Policymakers noted that global growth performed better than anticipated in the third quarter, even as U.S. tariffs and trade tensions continued to put pressure on the international economy. The SNB remains cautious as it tries to avoid returning to negative rates while also navigating Switzerland’s near-disinflation environment.

Swiss inflation fell to 0% in November, a trend partly driven by strong demand for the Swiss franc — a traditional safe-haven currency. Earlier this year, Switzerland was temporarily hit with some of the Trump administration’s highest reciprocal tariffs, which officials said placed significant strain on several key export sectors. Although the country reached a deal with the U.S. to reduce tariffs last month, the earlier 39% rate had already left a mark on the economy.

The broader global market mood was influenced by the Fed’s third rate cut of the year, lowering the Federal Funds rate to 3.5%–3.75%. Fed Chair Jerome Powell said the move gives the central bank space to “wait and see” how the economy unfolds, though he acknowledged that trade tensions had helped drive inflation higher. Investors are now turning their attention to upcoming decisions from the European Central Bank and the Bank of England on Dec. 18, with analysts expecting both to hold rates steady.

Sector-wise, European defense stocks remained strong following a robust year for the industry, while tech shares dipped as Oracle’s disappointing results weighed on sentiment. Safe-haven precious metals also continued to attract investors, with silver rallying to nearly $64 an ounce and analysts predicting further gains into next year. Meanwhile, U.S. markets traded mixed, with the Dow inching higher as the S&P 500 and Nasdaq slipped.

source: cnbc