European stocks head for lower open as markets react to Fed, U.S. inflation data

Holly Ellyatt@HOLLYELLYATT

LONDON — European stocks are expected to open in negative territory Thursday as regional investors react to the U.S. Federal Reserve’s latest monetary policy decision and U.S. inflation data.

The U.K.’s FTSE index is expected to open 29 points lower at 8,193, Germany’s DAX 41 points lower at 18,600, France’s CAC 40 down 21 points at 7,849 and Italy’s FTSE MIB 42 points lower at 34,035, according to IG.

Regional markets are digesting the Fed’s decision Wednesday to hold the federal funds rate at 5.25% to 5.5% and to project only one rate cut this year.

That was down from the three cuts projected in its March meeting. However, the “dot plot” also indicated a more aggressive cutting path for 2025 — four rate cuts totaling a full percentage point are anticipated, up from three.

The move came after the latest U.S. inflation reading; the consumer price index stayed the same for the month of May, lower than the Dow Jones estimate for a 0.1% monthly increase. Year over year, the inflation yardstick increased 3.3%, which also came in below expectations.

The Fed’s post-meeting statement said “inflation has eased over the past year but remains elevated,” echoing language from the last statement.

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Asia-Pacific markets rose overnight with Chinese electric vehicle stocks seeing gains despite the European Union slapping tariffs of up of 38% on Chinese EV makers. In the U.S., S&P 500 futures rose slightly Wednesday night after the broad market index closed above 5,400 for the first time after the Fed decision.

There are no major earnings or data releases in Europe on Thursday.

Source : cnbc