European stock markets edged higher on Wednesday, following Wall Street gains after U.S. inflation data suggested a softer economic backdrop and raised expectations for easier monetary policy next month.
At 07:05 GMT, Germany’s DAX added 0.4%, France’s CAC 40 climbed 0.3%, and the U.K.’s FTSE 100 rose 0.2%.
Global sentiment buoyed by mild U.S. inflation
Investor sentiment received a lift on Tuesday after U.S. consumer prices increased only 0.2% in July, with an annual rise of 2.7%—a pace considered moderate enough to keep the door open for a potential Federal Reserve rate cut in September.
According to CME’s FedWatch tool, markets now assign roughly a 94% chance of a 25-basis-point reduction next month, up from 86% a day earlier and 57% a month ago. The news helped push the S&P 500 and the tech-heavy Nasdaq Composite to fresh record closes on Wall Street.
This positive momentum extended to Asia, with Japan’s Nikkei also hitting a new high, and the optimism carried into European trading.
German inflation remains controlled
In Europe, July data confirmed that German consumer prices rose 0.3% month-on-month, translating into a 2.0% annual increase, suggesting that inflation remains contained in the eurozone’s largest economy. Analysts note that inflation rates in major markets appear to be in a “Goldilocks” zone—not too hot to trigger aggressive central bank action, yet not too low to stall growth.
The European Central Bank had cut its key rate to 2% over the past year but held steady last month, projecting that inflation would remain near target in the medium term and reducing the need for immediate policy moves.
Corporate earnings continue to roll in
Quarterly results continued to shape market sentiment, even as earnings season nears its end.
- E.ON (TG:EOAE) saw first-half group earnings rise 13%, citing increased investment and stronger operational performance.
- RENK Group (TG:R3NK) reported second-quarter results that exceeded expectations, benefiting from steady European defense spending.
- Vestas Wind Systems (TG:A3LFGK) noted a 44% year-on-year drop in second-quarter turbine orders, as some clients delayed purchases amid policy uncertainty.
- Tui (TG:TUI1) lifted its full-year EBIT growth outlook after posting record third-quarter earnings, driven by strong performance in its Hotels & Resorts and Cruises segments.
Oil prices steady ahead of Trump-Putin meeting
Crude markets were mostly flat on Wednesday, as investors awaited a high-profile meeting between U.S. President Donald Trump and Russian President Vladimir Putin.
As of 03:05 ET, Brent crude futures dipped 0.1% to $66.09 a barrel, and U.S. West Texas Intermediate futures fell 0.1% to $63.11 a barrel. The Alaska meeting, scheduled for Friday, is expected to focus on the Ukraine war, which has been ongoing since February 2022 and has disrupted global energy markets.
Meanwhile, U.S. oil inventories, the world’s largest, rose by 1.52 million barrels last week, according to the American Petroleum Institute. Official data from the U.S. Energy Information Administration, due later in the day, may provide further insight into fuel demand as the summer travel season concludes.
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