European Stocks Dip Despite Global Rally, Earnings Weigh

Despite a global rally induced by U.S. inflation data, European stock markets experienced slight declines. The DAX in Germany, the CAC 40 in France, and the FTSE 100 in the U.K. all traded lower, with disappointing corporate earnings contributing to the subdued sentiment.

Impact of Earnings

Siemens shares dropped nearly 2% after reporting a 2% decline in second-quarter profit at its industrial business, primarily due to a slowdown in its factory automation division. Similarly, Deutsche Telekom’s stock fell despite reporting higher revenue in the first quarter. EasyJet shares slumped 6% after the airline posted a larger-than-expected pretax loss for the first half of the year. However, BT Group’s stock surged 9% after raising its dividend and achieving its cost-cutting program ahead of schedule.

The losses in European markets contrasted with the global rally seen in Wall Street and Asian markets. The April U.S. consumer price index rising below expectations raised hopes that the Federal Reserve could cut interest rates this year, likely starting in September. The European Central Bank is expected to cut rates before the Fed, likely in June.

Crude Oil Prices Rise

Crude oil prices extended gains on Thursday following the release of U.S. consumer inflation data and a bigger-than-expected draw in U.S. inventories. The softer-than-expected U.S. CPI release raised hopes for lower rates, potentially boosting future global economic activity and oil demand. U.S. oil inventories shrank more than anticipated, indicating improving demand, particularly with the approaching summer travel season.

Other Market Movements

Gold futures experienced a slight decline, while the EUR/USD currency pair traded lower. These movements reflect broader market dynamics influenced by economic data releases and central bank policies.