HONG KONG (AP) – European stocks fell in early trading Tuesday as investors focused primarily on the U.S. inflation report and the implications of a rate cut by the Federal Reserve, while Asian stocks closed mostly higher. Ta.
Crude oil prices rose.
Germany’s DAX fell 0.7% to 18,185.55. In Paris, the CAC40 index fell 0.6% to 8,071.74. In London, the FTSE 100 rose 0.2% to 7,958.24.
The outlook for the S&P 500 was flat, and the outlook for the Dow Jones Industrial Average was down 0.1%.
In Asian trading, Japan’s benchmark Nikkei 225 rose 1.1% to end at 39,773.13. The Japanese yen weakened while the US dollar rose slightly to 151.91 yen, approaching the 34-year high of 151.97 yen reached in late March.
Hong Kong’s Hang Seng rose for a second day, rising 0.6% to 16,828.07, while the Shanghai Composite Index rose less than 0.1% to 3,048.54.
In South Korea, the Kospi fell 0.5% to 2,705.16, while Australia’s S&P/ASX 200 rose 0.5% to 7,824.20.
An update on the U.S. consumer price index was expected to be released later Wednesday.
Stephen Innes said: “The upbeat mood sparked by Friday’s jobs report, which saw the index jump on wage growth data suggesting subdued inflationary pressures, suggests that the upcoming CPI release may be bigger than reality.” With this coming up, we have set the stage for a white-knuckle event.” Managing Partner of SPI Asset Management.
U.S. stock indexes came to a virtual standstill on Monday as trading eased after a turbulent few days in which they fell just short of record highs.
The S&P 500 fell less than 0.1% to 5,202.39. The Dow Jones Industrial Average fell less than 0.1% to 38,892.80, and the Nasdaq Composite rose 5 points to 16,253.96.
A series of reports suggesting that inflation and the economy remain higher than expected has prompted investors to hold off on predicting when interest rate easing will occur.
There are some flashpoints this week that could further shake up the forecast. Separate from Wednesday’s report on the inflation that U.S. consumers are feeling at the register, there will also be a report on wholesale-level inflation and U.S. households’ future inflation expectations.
Federal Reserve Chairman Jerome Powell recently said he expects another rate cut this year, but the central bank needs additional confirmation that inflation is on track to its 2% target. The Fed is keeping its key interest rate at the highest level since 2001, hoping to keep the economy and prices low enough for investment to curb inflation. The risk of keeping interest rates too high for too long is that it could cause a recession.
Friday’s surprisingly strong jobs report showed average hourly wages for workers trending in line with expectations, even as employers hired far more workers than expected last month.
A new earnings reporting season begins this week. Delta Air Lines, JPMorgan Chase, and other banks are the primary banks on the first day of the reporting period. Analysts expect S&P 500 companies to post their third consecutive quarter of growth.
Benchmark U.S. crude oil rose 37 cents to $86.79 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, rose 35 cents to $90.73 per barrel.
In currency trading, the euro rose to $1.0860 from $1.0856.
Zimo Zhong, Associated Press
