The three major stock averages in the US swung around the flatline on Wednesday, as the CPI report came broadly in line with forecasts and did not alter much expectations the Fed will start cutting interest rates next month. Consumer prices rose 0.2% in July from the previous month and 2.9% year-over-year, matching forecasts for the monthly increase but below the 3% estimate for the annual rate. Core inflation also rose 0.2% monthly and 3.2% annually, in line with forecasts. The tech sector was the top performer, followed by financials while utilities was the biggest loser. Among biggest companies, Microsoft (0.5%), Apple (0.1%), Nvidia (1%), Amazon (0.5%) and Meta (0.6%) were in the green while Alphabet (-1.9%) and Tesla (-1.2%) were lower.
The DAX extended gains and added 0.5% to 17900 on Wednesday afternoon, tracking its European peers higher, with traders keeping an eye on inflation updates. US CPI figures came broadly in line with expectations while inflation in the UK came below forecasts, raising bets the BoE will continue to cut interest rates. Adidas (2.3%), Rheinmetall (1.8%), MTU Aero Engines (1.6%), Porsche (1.5%) and Mercedes-Benz (1.4%) were among the top performers. In contrast, RWE lost about 4.4% after the Germany’s largest power producer recorded a drop in earnings amid a decline in power prices.
The FTSE 100 rose 0.5% on Wednesday as UK consumer price inflation for July increased less than anticipated, boosting expectations for a Bank of England rate cut. All sectors saw gains except industrial metal miners, which fell nearly 1% due to weaker sentiment from a larger-than-expected drop in Chinese lending. UK inflation rose to 2.2%, slightly below forecasts of 2.3%, and services inflation slowed more than expected. This suggests the Bank of England might continue easing policy despite strong job market data. Aviva gained 0.3% after reporting a 14% rise in first-half operating profit, while Flutter surged 13% on raising its full-year outlook following a strong second quarter.
The CAC 40 gained 0.6% to approach the 7320 level on Wednesday afternoon, in line with its European peers, with traders keeping an eye on inflation updates. US CPI figures came broadly in line with expectations while inflation in the UK came below forecasts, raising bets the BoE will continue to cut interest rates. In France, most inflation figures for July were slightly revised upwards. On the corporate front, Stellantis NV (2.4%), LVMH (1.5%), STMicroelectronics (1.5%), Michelin (1.4%) and Hermes (1.3%) were among the top performers. Sanofi on the other hand, was the biggest loser (-0.7%).
The IBEX 35 edged up 0.2% to 10,739 in Wednesday afternoon trading, showing a more modest rise compared to its European counterparts, while extending gains slightly from the previous session. Meanwhile, traders process fresh inflation prints, with US figures coming broadly in line with expectations while inflation in the UK came below expectations. Leading Spanish stocks showed mixed performance, as Inditex (+0.7%), CaixaBank (+1.7%), Amadeus (+0.4%), and Naturgy (+1%) gained, while Aena (-0.5%) and Endesa (-0.7%) both declined.
