Stock markets in the red, Fed cut recedes. Milan -1.4%, Wall Street closes mixed
US inflation reached its highest level since May 2023 in April. Oil stocks did well in the stock market with crude oil still running, while the truce in Iran hangs by a thread
Key points
(Il Sole 24 Ore Radiocor) - Fears over whether the truce in Iran will hold, with US President Donald Trump reiterating in a radio interview "on Iran, I'm not in a hurry", and US inflation, which in April hit the highest since May 2023, weighed on European stock exchanges, which closed the session in the red. Faced with the disruption of supply chains caused by the closure of the Strait of Hormuz, consumer prices have surged and it remains to be seen how the figure will be received by the Fed. According to Richard Flax, Chief Investment Officer at Moneyfarm, 'rate cuts later this year look less and less likely, just as rising energy prices begin to weigh on consumption and overall economic growth'.
Thus, Milan's Ftse Mib ended the session at -1.36%, Paris' Cac (-1%) and Frankfurt's Dax (-1.6%) also fell. The other European indices did not fare any better: Amsterdam's Aex fell 1.5%, Madrid's Ibex 1.6%, while London's Ftse 100 ended the session at par.
Wall Street move, US inflation above expectations
Indices on Wall Street fell. At the close, the Dow Jones gained 0.11% to 49,761.23 points, the Nasdaq gave up 0.7% to 26,090.16 and the S500 dropped 0.14% to 7,402.17 points.
Weighed down by rising oil prices, the US-Iran truce 'hanging by a thread' (according to President Donald Trump) and the worst inflation reading in almost three years. Indeed, in April, US inflation stretched to 3.8 per cent year-on-year, the highest reading since May 2023, from 3.3 per cent in the previous month and compared to the 3.7 per cent expected based on market estimates.
The war with Iran drove up oil prices, with an immediate increase in the cost of petrol, diesel and aviation fuel, resulting in a 17.9% annual increase in energy prices in April. The 'core' figure stood at 2.8% from 2.6% in March and compared to the 2.7% expected by analysts. On a monthly basis, consumer prices rose by 0.6 % and the 'core' figure by 0.4 %.
