Global Markets Mixed as Inflation Data Calms Fears, Wall Street Hits Record High

Global markets presented a mixed picture today, with European markets subdued by economic concerns while Wall Street surged to a new record high following encouraging US inflation data. Investors are closely watching for signals regarding potential interest rate cuts from central banks.

US Markets Rally on Inflation News

US stocks experienced a important rally, driven by inflation figures that aligned with expectations. The S&P 500 climbed 0.86%, the Dow Jones advanced 1.07%, and the Nasdaq, heavily weighted towards the technology sector, gained 0.98%, hitting a new session record.

According to Kathleen Brooks, Research Director for XTB, “American actions manage to extend their earnings, and the Nasdaq has scored a new record in session.”

July’s inflation data revealed a 3.1% year-over-year increase, excluding volatile energy and food prices. While this represents an acceleration, it met analyst forecasts. The monthly increase slowed to 0.2%, compared to 0.3% in June, also in line with predictions.

Brooks emphasized that the inflation increase stemmed from rising costs in housing, airfare, and healthcare – factors “unrelated to customs duties.” This observation alleviated concerns about a trade-war-fueled price surge.

“Those who were waiting for a strong price push in the United States linked to customs duties were disappointed,” Brooks stated.The data has bolstered expectations of potential interest rate cuts by the Federal Reserve. However, the impact on US borrowing rates has been moderate, as investors remain cautious due to ongoing political uncertainty. The yield on the two-year US Treasury note fell to 3.72% from 3.77% on Monday, while the ten-year yield remained stable at 4.29%.

The Federal Reserve has maintained interest rates in a 4.25%-4.50% range since December, awaiting further clarity on the impact of trade policies on inflation before adjusting its monetary policy.

european Markets Under Pressure

In contrast to the US, European markets faced headwinds. Frankfurt’s DAX fell 0.23%, weighed down by the ZEW index, which measures German investor morale. The index declined in august, reversing three consecutive months of gains, due to concerns about US tariffs and the sluggish performance of the German economy.

The Euro weakened against the dollar, trading at $1.1688 per euro, a decrease of 0.63%.

BBVA Pursues Sabadell Takeover

Spanish bank BBVA announced it is continuing its hostile takeover bid for Sabadell, despite facing opposition from the Spanish government and uncertainty since late July.BBVA shares fell 1.87% in Madrid, while Sabadell shares rose 0.99%.

Sartorius Leads Gains, Health Sector Strong

German laboratory equipment supplier Sartorius led gains on the DAX, surging 7.41% to €197.15, boosted by a positive advice from Jefferies. The broader European health sector also benefited from a significant jump in Tecan group shares, which rose 9.57% to 164.20 Swiss francs on the Zurich Stock Exchange, driven by a share buyback program.

Oil Prices Dip

Oil prices edged lower, with Brent crude from the North Sea trading at $66.33 per barrel (-0.45%) and american WTI crude at $63.49 per barrel (-0.73%) around 4:00 p.m. GMT.