Insurers in the storm on Wall Street. EU stock exchanges rise on the eve of the Fed

(Il Sole 24 Ore Radiocor) - Purchases on banks pushed the European stocks, which closed the session higher. The market looks to US quarterly reports and, above all, to monetary policy ahead of the Fed's decision on rates tomorrow, Wednesday 28 January. For Filippo Diodovich, senior market strategist at IG Italia, "the main scenario remains that of firm rates", with the US central bank "oriented to 'take time' and assess the mix between disinflation and labour market trends". Putting aside concerns related to trade tensions - despite President Trump's announcement of an increase in tariffs on some South Korean goods from 15% to 25% - the market awaits the words of Fed Governor Jerome Powell: if "he reiterates that more evidence is needed before cutting, the narrative becomes 'higher for longer'; if instead he recognises more solid progress on inflation, the hypothesis of cuts in 2026 based on the data comes to the fore," continue IG. In any case, the analyst expects that a new cut 'could come with the inauguration of the new president at the June meeting'. In the meantime, the market is betting on a pause in the cut cycle (Cme Fedwatch quotes 97.2 per cent as the possibility that rates will remain firm at 3.5-3.75 per cent).

Thus, almost all major European stock markets closed with a positive tone: Milan led the Old Continent at +1.1%, followed by Paris +0.3%, Frankfurt -0.1%, Amsterdam +0.3%, Madrid +0.7%, Euro Stoxx 50 +0.6% and London +0.5%.

Wall Street, on the other hand, travelled at two speeds, with the S&P 500 and Nasdaq rising thanks to the boost of tech stocks. In contrast, the Dow Jones is down, weighed down by the collapse of the stocks of the b>big American health insurers. A sectoral thud that stems from the Trump government's decision to control public money earmarked for Medicare Advantage, the state programme that pays for care for the elderly and disabled through private companies. According to the proposal, reimbursements should increase by just 0.09% in 2027, compared to +5% the year before. For companies this translates into less revenue and less profit. A storm is hitting stocks such as UnitedHealth, Cvs Health and Humana, which have lost almost a fifth of their value in a single session. UnitedHealth, by the way, has made international headlines in recent months for the murder of its former CEO, Brian Thompson. Murder for which Italian-American Luigi Mangione was charged.

For tech, Apple and Microsoft are up, while as we mentioned above, the market looks to the big tech earnings reports - expected between tomorrow and Thursday - in a week when more than 90 companies in the S&P 500 will release accounts. Earnings season remains solid so far, with about 75 per cent of companies beating expectations, according to FactSet.

In Milan, banks led the way, with Banca Mediolanum (+1.8%) among the best performers, in the aftermath of the Interbank Deposit Protection Fund (FITD) board's go-ahead for the rescue of Banca Progetto. Unicredit (+2.1%) and Bper Banca (+1.5%) also performed well, while Mediobanca (-0.9%) bucked the trend. Bought also in tech with St (+1.7%) and Prysmian (+2.3%), as well as in defence with Leonardo (+2.1%).