Swiss Market Index Shrugs Off Cloudy Economic Outlook to Close Higher
The Swiss Market Index closed 0.39% higher on Wednesday as investors took stock of the latest corporate and economic data prints while awaiting the US Federal Reserve's monetary policy decision.The Fed is widely expected to hold its key interest rate steady in the 3.5% to 3.75% range later today.Closer to home, the annual inflation rate in the euro area edged up to 3.2% in May from 3% in April, final data from Eurostat showed. In the UK, the annual inflation rate stood at 2.8% in May, unchanged from the previous month.Back in Switzerland, the KOF Swiss Economic Institute lowered its real gross domestic product sport-adjusted growth forecast for the country to 0.8% in 2026 from the previous 1% projection. In 2027, GDP is now expected to expand by 1.5%, down from the prior 1.7% forecast."The war waged by the United States and Israel against Iran, and the resulting higher oil prices, are weighing more heavily on the economic outlook than assumed in the previous forecast," according to the KOF. "The baseline forecast assumes a relatively timely settlement of the Iran war. A continuation and renewed escalation of the conflict represent downside risks. In addition, trade and geopolitical risks remain elevated, including possible additional US tariffs against Switzerland as well as potential shifts in investment by Swiss companies to the United States."Over to corporates, Straumann Holding (STMN.SW) shares closed the session 10.80% higher as it lifted its 2026 financial guidance, now anticipating profitability to be "significantly" above its previously issued outlook. The Swiss dental products group expects its core EBIT margin expansion of between 140 basis points and 170 basis points at constant 2025 exchange rates, against its prior forecast of 30 basis points to 60 basis points. Organic revenue growth for 2026 is still projected to be in the high single digits."Strong execution across our franchises, combined with significant operational leverage driven by manufacturing efficiencies on the one hand and disciplined resource management on the other while continuing to progress on our strategic priorities, contributed to stronger-than-expected profitability," said Chief Executive Officer Guillaume Daniellot. "With the visibility we have today, we are confident in raising our profitability outlook for 2026."In other news, G7 countries expressed their support for "a robust and comprehensive diplomatic follow-on agreement" to the memorandum of understanding reached by the US and Iran.
