Source: Sharecast
US stocks performed well overnight, with the S&P 500 and Nasdaq both registering their eighth day of gains – the longest win streak this year – amid rising expectations that the Federal Reserve will move to cut interest rates next month.
Back in Europe, Sweden's central bank, the Riksbank, slashed interest rates for the second time this year on Tuesday, and indicated that "two or three more" cuts could happen this year if the inflation outlook remains the same. The Riksbank trimmed its key policy rate from 3.75% to 3.5%, as expected by the market.
The Stoxx 600 was up 0.2% at 515.64 early on, closing in on the 524.71 record closing high reached in May. Benchmark indices across Frankfurt, Paris, Milan and Madrid were putting in moderate gains, offsetting a 0.4% drop in London as the FTSE 100 was dragged lower by utilities and energy stocks.
In Germany, wholesale price deflation eased to its lowest level in 13 months, in line with economists' predictions. The producer price index fell at a year-on-year rate of 0.8% in July, Destatis reported. While this was the 13th consecutive month of falling prices, the deflation rate halved from the previous month (-1.6%) and was the lowest level since July 2023.
Looking ahead, the final estimate for eurozone inflation data for July will be out at 1100 CEST, and is expected to show that core annual inflation across the single-currency region held steady at 2.9%, in line with the preliminary estimate released two weeks ago.
Market movers
A 1% drop in the price of Brent crude was weighing on energy stocks early on, with London-listed oil majors Shell and BP trading in the red. Also weighing on the FTSE 100 were heavy falls from telecoms groups BT and Vodafone.
Elsewhere, European chip names were providing a lift as global financial markets gear up for the latest earnings report from titan Nvidia next week, with the US stock rising strongly the previous evening on Wall Street. M&A activity in the sector was also helping sentiment after AMD bought server maker ZT Systems for $4.9bn.
ASML Holdings, ASM International and BE Semiconductor Industries were all putting in decent gains early on.