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.
SEC proposal could return listings to London
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.” Robert’s team advises companies on where and how to list, and he said the upcoming rule is already drawing attention in the corporate world.
The SEC’s concerns are rooted in 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 proposed change comes at a time when European markets are still struggling to hold onto their biggest players. Several high-profile firms have abandoned the continent in recent years, moving to U.S. exchanges where valuations and liquidity are higher. A change in SEC rules could slow that flow, or even send it in reverse.
Gold edges up as traders bet on Fed cuts
While the stocks story plays out in Europe and the U.S., gold prices are inching higher too. Traders are now pricing in a 98% chance that the Federal Reserve will lower rates at its next meeting in September. That bet 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 an ounce, after closing 0.3% higher the day before.
Gold has already surged nearly 30% this year, helped by a mix of trade tensions, political instability, central bank purchases, and expectations that rates will drop. Fidelity International sees even more upside, predicting gold could hit $4,000 an ounce by the end of 2026.
Elsewhere in metals, silver, platinum, and palladium stayed mostly flat. The Bloomberg Dollar Spot Index dropped 0.2%, giving a bit of support to the precious metals complex.
On the currency front, the dollar ticked up 0.2% Tuesday after last week’s sharp fall. The move followed a shaky U.S. jobs report on Friday that signaled cracks in the labor market, increasing expectations of a September cut.
The volatility spiked further after President Donald Trump fired a top statistics official and Federal Reserve Governor Adriana Kugler resigned, moves that spooked currency markets.
Now the greenback is caught in a tug-of-war. Some traders are looking to see if the dollar can build on its small July gain, its first monthly rise this year. Others are watching central bank signals closely, especially with rate cuts almost fully priced in. As of press time, the euro sat at $1.1559, down 0.12%, and sterling was steady at $1.328.
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