European stock markets traded steadily on Tuesday as investors assessed key regional inflation and unemployment data, while solid gains on Wall Street provided a positive backdrop.
As of 03:05 ET (07:05 GMT), Germany’s DAX index rose 0.4%, France’s CAC 40 dipped slightly by 0.1%, and the UK’s FTSE 100 remained mostly unchanged.
ECB Meeting in Focus
Investors are closely watching the European Central Bank’s (ECB) policy meeting later this week, anticipating potential monetary easing to support the sluggish European economy.
Recent data has shown Eurozone business activity contracted unexpectedly in September, and inflation concerns have largely eased. This has led to growing expectations that the ECB will cut interest rates on Thursday.
Supporting this outlook, German wholesale prices dropped by 1.6% in September compared to the previous year. Meanwhile, French consumer price inflation (CPI) fell to just 1.1% annually, and Spain’s CPI decreased to 1.5%, both well below the ECB’s target of 2%.
In the UK, unemployment unexpectedly dropped to 4% in August from 4.1%, but a decrease in average earnings suggests that the Bank of England could lower interest rates at its next meeting in November.
Strong Close on Wall Street
European markets received a boost from Wall Street’s strong performance overnight. The S&P 500 and Dow Jones Industrial Average hit new highs, fueled by renewed enthusiasm around tech, artificial intelligence (AI), and corporate earnings.
Investors are now turning their attention to upcoming earnings reports from major banks, including Bank of America, Goldman Sachs, and Citigroup. Nvidia, a leader in AI technology, also remains in focus after its stock surged more than 2% on Monday, pushing its market value to $3.39 trillion—just shy of Apple’s $3.52 trillion, placing Nvidia close to being the world’s most valuable company.
Ericsson Shines
In corporate news, Swedish telecom giant Ericsson saw its stock jump more than 8% after reporting better-than-expected core earnings and sales. The company noted a rebound in demand for 5G equipment, particularly in North America, signaling a potential turnaround for the telecom equipment market.
Additionally, French luxury group LVMH is set to release its third-quarter revenue later today, with investors keeping a close eye on its performance given the sector’s dependence on Chinese demand.
Oil Prices Slide on China Demand Concerns
Crude oil prices continued their downward trend on Tuesday, driven by growing concerns over weakening demand, especially from China, the world’s largest oil importer.
As of 03:05 ET, Brent crude fell 3.6% to $74.64 per barrel, while U.S. West Texas Intermediate (WTI) dropped 3.8% to $71.00 per barrel.
Both benchmarks had already declined about 2% on Monday and continued to fall after China reported a fifth consecutive monthly decline in oil imports, stoking fears of softer demand growth. These concerns were further heightened by the Organization of Petroleum Exporting Countries (OPEC) lowering its global oil demand forecast for the third consecutive month.
Oil prices also faced downward pressure as traders scaled back geopolitical risk premiums following a report suggesting that Israel will not carry out attacks on Iran’s oil and nuclear facilities. Such a move would have escalated tensions in the oil-rich region, potentially disrupting supply.
Outlook
As European markets navigate inflation and unemployment figures, attention remains focused on central bank decisions and corporate earnings, with external risks like China’s economic slowdown and geopolitical developments continuing to weigh on sentiment.
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