European stocks pull back as inflation nerves grip markets
European stocks slipped into negative territory on Tuesday amid nervousness over inflation, with the next reading of U.S. inflation due at the end of the week.
The pan-European Stoxx 600 dropped 0.5% in early trade, with tech and retail stocks shedding 1.1% to lead losses as almost all sectors and major bourses slid into the red.
International markets are gearing up for key U.S. data releases this week, including the latest inflation reading on Friday.
May’s consumer price index in the U.S. is expected to be just slightly cooler than April, and some economists are expecting it could confirm that inflation has peaked.
The University of Michigan consumer sentiment index, also due Friday, will also be closely watched by investors.
Shares in Asia-Pacific were mixed on Tuesday as the Reserve Bank of Australia announced a larger-than-expected interest rate hike of 50 basis points.
U.S. stock futures declined Tuesday morning as Wall Street struggles for direction ahead of Friday’s key inflation print.
The U.K.’s market reaction amid political turbulence in the country was limited on Tuesday. On Monday evening, U.K. Prime Minister Boris Johnson survived a vote of confidence triggered by his own lawmakers amid increasing dissatisfaction in his leadership.
Some 211 Conservative Party lawmakers voted in favor of the prime minister on Monday, while 148 voted against him. Johnson needed the support of a simple majority of 180 MPs to win the vote, but the figure of 148 was worse than many expected.
It is also worse than the result of a similar vote that former leader Theresa May faced in 2018. She resigned as prime minister just six months later.
It’s a quiet day on the data and earnings front in Europe. Germany’s industrial orders fell by more than expected in April for a third consecutive monthly decline, as weak demand and added uncertainty since Russia’s invasion of Ukraine continued to weigh.
There was little by way of major individual share price movement on Tuesday. Swiss logistics company Interroll fell 5% to the bottom of the Stoxx 600 after Credit Suisse cut its target price for the stock.
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