Stocks opened lower in European markets on Thursday after most Asian indexes rose, tracking gains on Wall Street driven by hopes that inflation would get back on track.
This optimism comes as the price that U.S. consumers had to pay for gas, auto insurance, and everything else in April was 3.4% higher overall than the same month a year earlier, and inflation in March was 3.5% higher. This comes from Wednesday’s report showing that the
The economic slowdown came as a relief after consumer price index (CPI) releases earlier this year were consistently lower than expected. The report is based on expectations that the U.S. Federal Reserve could lower key interest rates later this year, which is a major concern for most investors.
In Asian trading, Tokyo’s Nikkei stock average rose 1.4% to 38,920.26, despite the government reporting that Japan’s economy contracted at an annual rate of 2% in the first quarter.
Hong Kong’s Hang Seng Index rose 1.6% to 19,376.53. The Shanghai Composite Index rose 0.1% to 3,122.40.
In Australia, the S&P/ASX 200 rose 1.7% to 7,881.30 and South Korea’s Kospi rose 0.8% to 2,753.00.
Taiwan’s Tyex rose 0.7%, while India’s Sensex fell 0.4%.
On Wednesday, the S&P 500 rose 1.2% to close at 5,308.15, surpassing its all-time high set a month and a half ago. The Dow Jones Industrial Average rose 0.9% to $39,908.00, and the Nasdaq rose 1.4% to $16,742.39, breaking its own record set the previous day.
The losers were GameStop and AMC Entertainment, which reversed momentum after an incredible start to the week. GameStop is down 18.9%, but is still up 126.5% for the week so far.
AMC Entertainment fell 20% after announcing it would issue about 23.3 million shares to erase $163.9 million in debt.
A separate report on Wednesday showed that U.S. retailer spending in April did not grow from March. Economists had expected growth of 0.4%.
A slowdown in retail sales could be seen as a positive for the market as it could reduce upward pressure on inflation. But weak U.S. consumer spending will erode one of the main pillars that keep the economy from recession. Pressures on low-income households are particularly high.
Traders now expect a nearly 95% chance that the Fed will cut key interest rates at least once this year, according to CME Group data. This is up from just under 90% the day before.
In other trading early Thursday, benchmark U.S. crude oil rose 27 cents to $78.90 a barrel in electronic trading on the New York Mercantile Exchange. It rose 61 cents on Wednesday.
Brent crude, the international standard crude, rose 29 cents to $83.04 per barrel.
The dollar fell from 154.88 yen to 154.73 yen. The euro fell from $1.0885 to $1.0872.
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