European markets: ECB interest rate decision

LONDON — European stocks closed at a record high Thursday as traders digested the European Central Bank’s first interest rate cut since September 2019.

As well as briefly touching a fresh all-time intraday level, the pan-European Stoxx 600 index closed at 524.75 points, narrowly surpassing the record close marked on May 15, according to LSEG data.

All major bourses and most sectors were trading in the green, with tech stocks jumping 1.17% while utilities fell 0.9%.

Health-care stocks added 1.2%, with Danish pharmaceuticals giant Novo Nordisk climbing 3.9% to hit an all-time high amid continued demand for its blockbuster Wegovy weight loss drugs. Zealand Pharma, which is also working on a weight loss drug, jumped to the top of the benchmark, up 7.4%

Equity markets were more muted stateside, with the S&P 500 trading flat despite two sets of softer U.S. labor market data boosting hopes of Federal Reserve rate cuts. Investors are now awaiting Friday’s nonfarm payrolls report for May.

The ECB confirmed a widely-anticipated reduction in interest rates at its meeting in Frankfurt, despite lingering inflationary pressures in the 20-nation euro zone. It takes the central bank’s key rate to 3.75%, down from a record 4% where it has been since September 2023.

Money markets had fully priced in the 25 basis point move lower at the June gathering. It is the first cut since September 2019, when the deposit facility was in negative territory.