Lisbon Stocks Start Week Firmer as Traders Eye Fed Signals

Foreign investors woke up to a familiar contradiction on the Portuguese trading floor this Monday: an early flicker of optimism against a backdrop of global nerves. Euronext Lisbon’s benchmark PSI edged 0.29% higher at the opening bell, giving the impression of strength, yet traders immediately warned that the move could fade as the day progressed. By mid-morning, the index hovered around 7,748 points, essentially flat for the session and slightly below last Friday’s close.

Morning lift bucks cautious Europe

Lisbon’s initial pop stood out because most continental futures were barely moving. Germany’s DAX was up 0.1%, France’s CAC 40 added 0.07%, and London’s FTSE 100 pointed 0.15% lower. A modest bid for Portuguese equities therefore felt notable, even if it rested on thin pre-lunch volumes. Market makers cited lingering post-summer portfolio rotations, with fund managers re-weighting toward peripheral euro-area assets that still trade at discounts to northern peers.

A market still in recovery mode

Zoom out and the story brightens. The PSI has gained about 17% year-to-date, a sharp turnaround from 2024’s marginal loss. Telecom player NOS, courier group CTT, lender BCP and conglomerate Sonae have carried much of that weight, offsetting weakness in EDP Renováveis and pulp-producer Navigator. For newcomers to Portugal, the rally underscores how concentrated the local benchmark remains: 20 companies account for the move, and just five explain the bulk of 2025’s outperformance.

Why the Fed matters to Lisbon traders

The next catalyst will not be decided in the Iberian Peninsula. Investors are fixated on this week’s Federal Reserve meeting, where a widely anticipated 25-basis-point rate cut could jolt global risk appetite. If the Fed delivers, the euro may strengthen, potentially trimming the competitive edge of Portuguese exporters but lowering debt-service costs for highly leveraged domestic firms. Conversely, any Fed surprise could magnify volatility, especially as the European Central Bank just signalled stability by holding its own rates steady.

Winners and laggards on the PSI board

Early price action singled out BCP and Sonae as today’s outperformers, each advancing nearly 1%. Energy names lagged despite Brent crude flirting with $67.30 per barrel after drone attacks on Russian refineries. Traders blamed profit-taking in Galp following last week’s oil-price spike. A smattering of defensive buying appeared in utilities, with REN – Redes Energéticas Nacionais marginally higher as investors sought shelter ahead of Wednesday’s US inflation data.

What expats should watch next

For residents earning in foreign currencies, Portugal’s equity rebound translates into two practical considerations. First, a stronger PSI can lift pension funds tied to local indices, nudging long-term savings plans higher. Second, sustained gains may foreshadow more aggressive real-estate pricing, given the historical correlation between Lisbon’s stock and property markets. Still, the macro picture is far from settled. Persistent core inflation at 3% in the euro zone, softening US payrolls and simmering US–China trade talks in Madrid could all swing sentiment within days. Keep an eye on the Fed’s press conference Wednesday evening Lisbon time; the tone Chairman Powell strikes will likely dictate whether today’s modest uptick blossoms into a September rally or fizzles into another sideways week.