London (AFP) – Lower oil prices helped lift European stock markets on Wednesday, but continued high US inflation weighed on Wall Street. Paris and Frankfurt closed higher, though well off the session’s highs as oil prices clawed back some losses late in the day. London lagged as energy heavyweights BP and Shell fell.
“Lower energy prices are providing a supportive environment for European markets,” said Fawad Razaqzada, market analyst at FOREX.com. “The resilience of the European economy has been more impressive than many had expected.” In New York, all the main indices were little changed in late-morning trading. Both main crude oil contracts have fallen this week as Iran and Oman edge towards a deal to open a temporary shipping corridor in the Strait of Hormuz.
While US Treasury Secretary Scott Bessent said Washington was declaring an “economic D-Day” against Tehran and its trade partners, Washington has so far held back from enforcing the measures, which in any case appear softer than many had feared. Oil prices had dropped more than three percent Wednesday before recovering, with the benchmark Brent holding well below $90 a barrel. Gold slipped and the dollar was little changed.
Just before Wall Street opened, the Commerce Department reported that the personal consumption expenditures price index — the Federal Reserve’s preferred inflation measure — had risen 3.7 percent in July from a year ago. While that was largely in line with analyst expectations, it still leaves inflation well above the Fed’s two-percent target, keeping alive fears of an interest rate increase.
Thursday sees the start of the annual Jackson Hole symposium of central bankers and other economic policy makers, which could provide clues on US interest rate policy. “Inflation is still too high for comfort, and investors will be watching to see whether Fed Chair Kevin Warsh uses Friday’s Jackson Hole speech to address how policymakers plan to bring it back toward the Fed’s long-term target,” said eToro analyst Bret Kenwell.
Investors are also awaiting Wednesday’s after-hours earnings report from AI chip giant Nvidia. The company has become a key marker of the reporting season as investors use it to judge the health of the AI boom that has sent markets to record highs over the past two years. The figures come during rising concern about when the vast sums of cash being pumped into AI software and hardware will see a meaningful return, if ever.
“The second-quarter number itself may end up mattering less than what management says about the quarter ahead,” said Axel Rudolph, a market analyst at IG. “It’s entirely possible for the headline print to look solid and the stock to still sell off if the third-quarter guide comes in below what’s already embedded in current estimates,” he added. Nvidia shares were down about one percent.
Meta shares were up more than two percent after the company reached a settlement to pay a coalition of US states as much as $16.7 billion and make changes on how youths use its social media sites.
– Key figures at around 1545 GMT –
West Texas Intermediate: DOWN 0.3 percent at $82.10 per barrel
Brent North Sea Crude: DOWN 0.3 percent at $87.03 per barrel
New York – DOW: DOWN 0.2 percent at 53,457.75 points
New York – S&P 500: DOWN less than 0.1 percent at 7,676.26
New York – Nasdaq Composite: DOWN 0.2 percent at 26,103.02
London – FTSE 100: DOWN less than 0.1 percent at 10,878.12 (close)
Paris – CAC 40: UP 0.3 percent at 8,462.39 (close)
Frankfurt – DAX: UP 0.1 percent at 26,285.96 (close)
Tokyo – Nikkei 225: UP 0.6 percent at 66,262.16 (close)
Hong Kong – Hang Seng Index: UP 0.6 percent at 25,652.97 (close)
Shanghai – Composite: UP 0.6 percent at 3,912.52 (close)
Euro/dollar: DOWN at $1.1652 from $1.1674 on Tuesday
Pound/dollar: DOWN at $1.3589 from $1.3648
Euro/pound: UP at 85.75 pence from 85.52 pence
Dollar/yen: UP at 159.38 yen from 159.16 yen
© 2024 AFP
