Inflation Jitters Persist: Global Stocks Retreat as Price Pressures Linger

Global stocks mostly declined on Wednesday following British inflation data that dashed hopes for an immediate Bank of England rate cut, and Federal Reserve minutes highlighted concerns about persistent inflationary pressures.

London stocks closed lower, with the pound strengthening after the announcement that Britain’s Consumer Prices Index rose 2.3 percent in April, slightly exceeding analyst expectations of 2.1 percent.

“This was disappointing news, and the markets moved quickly to price out hopes of a June rate cut. It now looks as if September is most likely,” said David Morrison, senior analyst at Trade Nation.

In the US, stocks traded flat for most of the day following losses in leading Asian and European markets. However, US indices turned negative after the Fed minutes revealed that policymakers were frustrated with the slow progress in reducing inflation toward the central bank’s target of two percent.

“The disappointing inflation data, coupled with strong economic figures in the first quarter, led them to conclude that ‘it would take longer than previously anticipated’ for them to be confident that inflation was moderating,” the Fed said.

Briefing.com analyst Patrick O’Hare noted that these concerns were in line with the Fed’s mindset at the May 1 meeting, and the release gave investors a reason to sell following a significant rally since the meeting.

All three major US indices ended lower, with the Nasdaq down 0.2 percent, retracing after two consecutive record-setting sessions.

Nvidia, a leading AI chip-maker, reported a profit of $14.9 billion on revenue of $26 billion in the recently ended quarter, reflecting significant year-over-year growth. Its stock rose 3.5 percent in after-hours trading.

Elsewhere, Marks & Spencer saw a 3.7 percent rise in its stock price following a strong profits report, but this wasn’t sufficient to lift London’s FTSE 100 Index.

Anglo American edged up 0.4 percent after rejecting BHP’s latest bid, while Target fell 8.0 percent after reporting a drop in comparable sales.

Moderna surged 13.7 percent after announcing its participation in the 2024 American Society of Clinical Oncology annual meeting.

Copper prices fell for a second day as traders took profits after a rally that saw it peak above $11,000 a ton.

Key figures around 2040 GMT:

– New York: Dow -0.5% at 39,671.04 (close)
– S&P 500: -0.3% at 5,307.01 (close)
– Nasdaq Composite: -0.2% at 16,801.54 (close)
– London: FTSE 100 -0.6% at 8,370.33 points (close)
– Paris: CAC 40 -0.6% at 8,092.11 (close)
– Frankfurt: DAX -0.3% at 18,680.20 (close)
– EURO STOXX 50: -0.4% at 5,025.17 (close)
– Tokyo: Nikkei 225 -0.9% at 38,617.10 (close)
– Hong Kong: Hang Seng Index -0.1% at 19,195.60 (close)
– Shanghai: Composite Flat at 3,158.54 (close)
– Dollar/yen: Up at 156.75 yen from 156.17 yen on Tuesday
– Euro/dollar: Down at $1.0826 from $1.0854
– Pound/dollar: Up at $1.2717 from $1.2709
– Euro/pound: Down at 85.10 from 85.40 pence
– West Texas Intermediate: Down 1.4% at $77.57 per barrel
– Brent North Sea Crude: Down 1.2% at $81.90 per barrel