ETF Trading Volumes Spike as European Investors Rush to Safe Havens After French Political Shocks

Stocks posted modest gains on Monday as Wall Street weighed last week’s strong jobs report and looked ahead to a pivotal Federal Reserve meeting. Investors largely stuck to the sidelines, with major indexes notching small advances and Treasury yields holding steady. ## Stocks Struggle for Direction Ahead of Fed Decision US equities saw muted trading to kick off the week, with the **S&P 500** closing just above the flatline. The **Nasdaq Composite** ticked higher, while the **Dow Jones Industrial Average** also managed a slight gain. The cautious tone followed Friday’s robust nonfarm payrolls data, which showed continued strength in the labor market and complicated the outlook for Fed rate cuts this year. Markets are now focused on Wednesday’s Federal Reserve meeting, where policymakers are expected to keep rates unchanged but may revise their outlook for future cuts. Traders are reassessing the odds of a September rate reduction as inflation remains sticky and economic growth holds up. ## Bonds, Commodities, and FX Hold Steady In the bond market, **Treasury yields** were little changed, with the 10-year yield holding near recent highs. The strong jobs report last week pushed yields higher, reflecting expectations that the Fed will remain cautious on policy easing. Commodities markets were quiet, with oil prices steady as investors balanced demand concerns against ongoing supply risks. Gold prices hovered near recent lows, pressured by higher yields and a firmer dollar. On the currency front, the **US Dollar Index (DXY)** edged up slightly, while **EUR/USD** slipped as traders positioned for the upcoming Fed and European Central Bank meetings. ## Key Movers: Tech Outperforms, Financials Lag Technology stocks outpaced the broader market, with large-cap names extending their recent rally. Chipmakers continued to attract inflows amid optimism around AI demand, helping to lift the tech-heavy Nasdaq. Meanwhile, financials underperformed as higher yields raised concerns about funding costs and loan growth. Energy shares were little changed, tracking the subdued move in oil. Healthcare and consumer staples names saw modest buying, reflecting a defensive tilt in the market as investors await more clarity from central banks. ## What to Watch: Fed Meeting in Focus All eyes are now on the Federal Reserve, with its policy announcement and updated economic projections due Wednesday. Markets will scrutinize the new “dot plot” for clues on the likely timing and pace of rate cuts. Investors are also watching for any signals on inflation and growth that could shape the second half of 2026. Beyond the Fed, upcoming inflation data and next week’s European Central Bank meeting will be key for global risk sentiment. For those looking to position portfolios for the evolving rate environment, see The Ultimate 2026 Guide to Building a Bulletproof ETF Portfolio in Europe for strategies and context. With central banks in the spotlight and economic data driving volatility, markets are likely to remain sensitive to any new signals on policy or growth in the days ahead.