European markets slipped Wednesday, following a tech-driven selloff on Wall Street, while U.K. inflation data came in above expectations, raising questions about the Bank of England’s future policy path.
At 08:00 GMT, Germany’s DAX dropped 0.5%, France’s CAC 40 eased 0.2%, and London’s FTSE 100 also fell 0.2%.
Tech Worries Weigh on Markets
European shares mirrored losses in Asia and Wall Street, where tech stocks fell amid concerns over increased U.S. government involvement in the sector. Reuters reported that U.S. Commerce Secretary Howard Lutnick is exploring equity stakes in Intel (NASDAQ:INTC) and other chipmakers as part of CHIPS Act funding.
Corporate earnings sentiment in Europe also cooled slightly. Analysts now forecast an average 4.6% rise in second-quarter earnings, down from last week’s expectation of 4.8%, signaling a subtle slowdown in business optimism.
UK Inflation Surpasses Forecasts
Consumer price inflation in the U.K. rose to 3.8% in July, up from 3.6% in June, exceeding the 3.7% consensus. This marks the highest headline CPI reading since January 2024.
The Bank of England had already anticipated this uptick in its August Monetary Policy Report. Capital Economics analysts still see a possible rate cut in November but caution that stronger wage growth or rising inflation expectations could postpone it until 2026.
Eurozone inflation data is expected later today, with forecasts pointing to a stable 2.0% year-on-year rate, aligning with the European Central Bank’s medium-term target.
Corporate Updates
The defense sector in Europe remains subdued amid renewed hopes for peace in Ukraine. Meanwhile, Ithaca Energy (LSE:ITH) reported robust first-half earnings and lifted its 2025 forecast thanks to higher production, stronger cash flows, and disciplined cost management.
Alcon (BIT:1ALC) lowered its 2025 sales outlook, citing ongoing U.S. tariff pressures, which affect nearly half of its revenue. FLSmidth (USOTC:FLIDY) met Q2 expectations, but revenue fell sharply and losses persisted in its Products division.
Oil Prices Rebound
Crude edged higher Wednesday, recovering from Tuesday’s losses as traders awaited developments in the Ukraine conflict. Brent crude rose 1% to $66.46 a barrel, while WTI climbed 1.2% to $62.48.
Tuesday’s declines came amid optimism that peace talks could lead to eased sanctions on Russia and a boost in global oil supply.
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