tl;dr
European stocks rose 0.4% amid hopes of U.S. interest rate cuts next month, with all major exchanges positive. The U.S. SEC is proposing a rule requiring certain foreign firms listed in the U.S. to maintain active listings outside the U.S. or lose regulatory exemptions, potentially prompting compani...
European stocks climbed Tuesday morning as traders held onto hopes that U.S. interest rates are finally coming down next month. The Stoxx 600 rose 0.4%, extending Monday’s rebound, with every major European exchange in positive territory. Meanwhile, a proposed regulation in the United States could pull more companies back toward European exchanges. The U.S. Securities and Exchange Commission is working on a change that would force certain foreign firms listed in America to have an active listing outside the U.S. or risk losing their regulatory breaks.
The proposal would target the Foreign Private Issuer status that currently helps non-U.S. companies avoid some strict filing requirements, including quarterly earnings reports. If approved, that rule could cause dozens of firms, including names like Arm and Spotify, to seek secondary listings in places like London to hold onto the FPI label.
Legal advisors say many foreign firms that are only listed in the U.S. but registered elsewhere will likely choose to add a new listing overseas instead of complying with full American disclosure rules. Robert Newman, co-head of UK capital markets at DLA Piper, said, “It could inadvertently stimulate the London markets.” His team advises companies on where and how to list, and he noted the upcoming rule is already drawing attention in the corporate world.
The SEC’s concerns stem from what it now sees as a growing hole in its oversight framework. When the FPI rules were first introduced, the assumption was that foreign companies listing in the U.S. were already following meaningful disclosure rules at home. But that assumption no longer holds, based on the agency’s latest concept release. This change comes while European markets are still struggling to hold onto their biggest players, as several high-profile firms have left the continent for U.S. exchanges where valuations and liquidity are higher. The new SEC rule could slow that migration or even reverse it.
While European and U.S. stock markets adjust to these developments, gold prices are inching higher. Traders are pricing in a 98% chance that the Federal Reserve will lower rates at its next meeting in September. This expectation has pushed bullion near $3,375 an ounce in early Asia trading. By 8:18 a.m. in Singapore, gold was up 0.1% to $3,377.26, following a 0.3% gain the previous day. Gold has surged nearly 30% this year, supported by trade tensions, political instability, central bank purchases, and prospects of lower rates. Fidelity International predicts gold could hit $4,000 an ounce by the end of 2026.
Other precious metals such as silver, platinum, and palladium remained mostly flat. The Bloomberg Dollar Spot Index dropped 0.2%, providing some support to metals. The U.S. dollar itself ticked up 0.2% Tuesday after last week’s sharp fall, influenced by a shaky U.S. jobs report signaling labor market weakness and expectations of a September rate cut.
Market volatility spiked following President Donald Trump’s firing of a top statistics official and Federal Reserve Governor Adriana Kugler’s resignation, moves that unsettled currency markets. The greenback now finds itself in a tug-of-war: some traders watch to see if it can build on its first monthly gain in July, while others closely monitor central bank signals with rate cuts nearly priced in. As of press time, the euro stood at $1.1559, down 0.12%, while sterling remained steady at $1.328.