LONDON: Ahead of a crucial earnings report, Wall Street equities remained unchanged, and European stock markets saw a decline as expectations of a swift rate decrease by the Bank of England were dashed by a dismal UK inflation report.
A decline in copper prices also affected mining stocks.
Following news that Britain’s Consumer Prices Index increased by 2.3% in April—a slower increase than in March but still exceeding analyst predictions of 2.1%—London markets closed down and the pound strengthened.
After hearing this depressing news, the markets swiftly priced in the possibility of a rate drop in June. September currently appears to be the most likely month, according to David Morrison, senior analyst at Trade Nation.
The US Federal Reserve members’ remarks that they need additional evidence that inflation is under control before reducing rates coincide with the news of inflation in the UK.
According to Luca Santos, a currency analyst at ACY Securities, “investors are looking for the Fed to cut rates by 40 basis points by year-end, versus 56 bps by the Bank of England and 67 bps by the European Central Bank.”
The major indexes in New York were all essentially unchanged.
Ahead of Nvidia’s Wednesday results release, which is sometimes used as a barometer of the mood of the market generally, US shares were mainly kept under check. Nvidia is the third-largest US corporation by market capitalization.
The chip manufacturer’s stock price has increased by 90% in 2024 as a result of businesses seeking to advance in the rapidly expanding artificial intelligence market favoring its high-end processors.
There is concern, though, that a sell-off may occur if the numbers fall short of the astronomically high expectations, especially among its fellow tech companies.
According to Patrick O’Hare, an analyst at Briefing.com, “the market is geared up to hear what Nvidia reports, but more to the point, it is geared up to see how Nvidia trades after the report and the effect that has on the broader market.”
Despite a solid profits report, Marks & Spencer’s shares increased 3.7 percent, but this was insufficient to lift London’s FTSE 100 Index higher overall.
Anglo American gained 0.4 percent following its rejection of BHP’s most recent offer, although it did not rule out more talks. Anglo American is a London-quoted firm.
Rio Tinto and Glencore, among other mining shares, dropped by 2.4 and 3.6 percent, respectively.
