NextFin news, European stock markets surged to record highs on Thursday, October 2, 2025, fueled by a strong rally in technology stocks and growing optimism that the US Federal Reserve will cut interest rates in the near future. The gains came amid weak US jobs data that increased expectations for monetary easing, overshadowing concerns about a partial shutdown of the US government.
Paris's CAC 40 index rose 1.2 percent to 8,061.25 points, while Frankfurt's DAX climbed 1.3 percent to 24,418.73 points. London’s FTSE 100 remained flat at 9,448.08 points. The rally was led by technology companies, with European tech giants such as ASML gaining 5 percent, and STMicroelectronics and Schneider Electric each adding more than 2 percent.
The tech sector's strength was supported by developments in artificial intelligence, including a preliminary agreement between South Korea’s largest chipmakers Samsung and SK Hynix and OpenAI, the developer of ChatGPT, to supply chips and equipment for AI infrastructure. This deal helped South Korea’s Kospi index jump 2.7 percent to a record high, with Samsung and SK Hynix shares reaching one-year peaks.
Investors' focus on the Federal Reserve's monetary policy was intensified by US private sector job losses reported by payroll firm ADP for September, which contrasted with expectations of employment growth. This data reinforced market speculation that the Fed may ease interest rates in the coming months to support economic growth.
Joshua Mahony, chief market analyst at Scope Markets, commented, "The data emboldens calls for the Fed to ease rates in the months ahead." However, Neil Wilson, UK investor strategist at Saxo, warned of potential volatility due to a "rolling data blackout" caused by the US government shutdown, which delayed the release of key non-farm payroll statistics.
Despite the US government impasse, all three major Wall Street indexes rose on Wednesday, with the S&P 500 and Nasdaq hitting record highs, further supporting global market sentiment.
In other European market news, UK supermarket Tesco shares climbed nearly 4 percent after the company raised its profit guidance for the 2025/2026 financial year, citing a successful competitive pricing strategy.
Currency and commodity markets showed modest movements, with the euro strengthening slightly against the dollar to $1.1750, while oil prices declined by about 0.5 percent.
The combination of a robust technology sector rally and hopes for Federal Reserve rate cuts contributed to the record-setting performance of European stocks on Thursday, October 2, 2025.
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