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Europe stocks drop on renewed jitters over French elections

written by Bella Palmer

In Europe, the focus was on the upcoming elections in France on Sunday, which will be followed by a second round on July 7

European stock markets dropped Tuesday as jitters resurfaced over impending French elections, while stocks on Wall Street closed mixed as AI company Nvidia reversed course, driving the Nasdaq higher.

Wall Street's tech-heavy Nasdaq and the broad-based S&P 500 bounced back while the Dow Jones Industrial Average (DJIA) dropped.

In Europe, Paris, London and Frankfurt all closed the day lower.

Nvidia was back in the green, closing up 6.8% on Tuesday after dropping sharply in recent days over concerns that the tech sector's rally had gone too far.

The US firm had briefly become the world's biggest publicly listed company last week, with a market capitalisation of over $3.3 trillion.

The Nvidia selloff "was not driven by fundamental factors," according to Kathleen Brooks, research director at XTB trading platform. The company is still expected to generate epic profits for this quarter.

The focus is now on the Friday release of the PCE index - the Fed's favoured inflation gauge - with traders hoping for another slowdown that would give decision-makers room to start easing policy.

In Europe, the focus was on the upcoming elections in France on Sunday, which will be followed by a second round on July 7.

President Emmanuel Macron called the snap legislative polls after his centrist party was trounced by the far-right National Rally in European Parliament elections two weeks back.

The euro remains supported even as some opinion polls show the National Rally (RN) leading, with a left-wing alliance in second and Macron's centrists third.

The latest French polls show that the far-right National Rally party has widened its lead ahead of the first round of voting on Sunday, according to City Index analyst Fiona Cincotta.

Meanwhile, President Macron's party is in third place, she said. Political uncertainty is deepening, which could limit the euro's upside.


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