European stocks muted; Micron hits sentiment ahead of key US inflation release

European Stocks Muted Ahead of Key U.S. Inflation Data

European stock markets traded in a muted fashion on Thursday, with a disappointing outlook from chipmaker Micron weighing on sentiment ahead of the release of key U.S. inflation data.

As of 04:30 ET (07:30 GMT), Germany’s DAX index was up 0.3%, France’s CAC 40 rose 0.1%, and the U.K.’s FTSE 100 dropped 0.2%.

Micron Outlook Dampens Sentiment

European equity indices are struggling for direction as investors await critical U.S. inflation data, seeking clues about the Federal Reserve’s rate-cutting timeline. Confidence has been hit by a negative reaction to a lackluster outlook from Micron, a company often viewed as an industry bellwether due to its wide exposure to various chip types and customers.

US PCE Data on the Horizon

Key economic data from Europe on Thursday includes eurozone confidence and services, as well as economic sentiment surveys. In the U.S., investors will scrutinize the final GDP release, although these figures are expected to be overshadowed by the PCE reading, the Federal Reserve’s preferred inflation measure, due on Friday.

The U.S. central bank kept interest rates unchanged at its June meeting but reduced its forecast for rate cuts to one 25 basis point reduction by year-end, down from three in March. Fed officials have called for more data to confirm that inflation is under control before easing monetary policy.

Additionally, the first U.S. presidential debate between Joe Biden and Donald Trump will take place later Thursday, hosted by CNN, as the November election approaches.

Corporate News

In the corporate sector, H&M stock fell 14% after the world’s second-largest listed fashion retailer reported a smaller-than-expected rise in March-May operating profit and projected a decline in June sales.

Nokia’s stock rose 0.2% after announcing it had agreed to sell its submarine networks business ASN to the French state for €350 million, though the deal would not impact its financial outlook.

Compagnie de Saint Gobain’s stock fell 0.3% after the French industrial giant announced plans to acquire Dubai-based construction chemicals company FOSROC for around $1 billion to drive international expansion.

Crude Oil Prices Slip

Crude prices dipped lower Thursday, influenced by a surprise increase in U.S. stockpiles, raising concerns about slow demand from the world’s top oil consumer. By 04:30 ET, U.S. crude futures (WTI) traded 0.1% lower at $80.82 per barrel, while Brent dropped 0.1% to $84.40 per barrel.

The U.S. Energy Information Administration reported a 3.6 million barrel jump in crude oil stocks last week, against expectations of a 2.6 million barrel draw. Additionally, a 2.7 million barrel build in gasoline inventories indicated weak fuel consumption despite the travel-heavy summer season, escalating concerns about slowing U.S. fuel demand amidst persistent inflation and high interest rates.