Market Analysis

European stock markets edged lower on Wednesday, despite U.K. inflation aligning with the Bank of England's target, with trading activity subdued due to a U.S. holiday.

At 03:15 ET (07:15 GMT), Germany's DAX index fell 0.2%, France's CAC 40 dropped 0.2%, and the U.K.'s FTSE 100 declined 0.3%.

UK Inflation Hits Target

The U.K.'s consumer price index increased by 2.0% annually in May 2024, down from 2.3% in April, hitting the Bank of England's target for the first time since July 2021.

This development contributes to the broader global disinflation trend, following favorable U.S. data last week, and comes ahead of the Bank of England's interest rate decision on Thursday.

While the central bank is expected to maintain current rates, with British wages rising faster than anticipated last week, a rate cut might be on the horizon.

Nvidia Becomes Most Valuable Company

Nvidia (NASDAQ: NVDA) surpassed Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) to become the most valuable company on Tuesday, continuing to benefit from the AI surge.

Nvidia's stock rose over 3%, elevating its market cap to $3.34 trillion, overtaking Microsoft's $3.31 trillion and Apple's $3.29 trillion, making it the most valuable company by market cap.

Just Eat Takeaway Stock Rises

Elsewhere, Just Eat Takeaway (AS: TKWY) saw its stock rise by 1.5% after announcing a deal to offer Amazon (NASDAQ: AMZN) Prime members in Germany, Austria, and Spain free delivery on orders above a certain price.

Need for Greater Political Stability in Europe

However, trading activity is expected to be limited on Wednesday due to the U.S. financial markets being closed for the Juneteenth holiday.

According to a survey by consulting firm EY, Europe needs to enhance political stability, reduce bureaucratic red tape, and mitigate energy price volatility to attract foreign investment. Stagnant growth, significant energy price fluctuations, and political uncertainty have negatively impacted the bloc's competitiveness compared to the U.S.

European markets were particularly affected last week after the European Parliament elections saw a swing to the far-right, prompting French President Emmanuel Macron to call a snap election.

Crude Prices Fall on Demand Concerns

Crude prices dipped on Wednesday, as an unexpected increase in U.S. crude inventories raised concerns about demand.

By 03:15 ET, U.S. crude futures (WTI) fell 0.3% to $80.50 per barrel, while Brent crude declined 0.3% to $85.08 per barrel.

U.S. crude stocks rose by 2.26 million barrels in the week ending June 14, according to the American Petroleum Institute's data released late Tuesday. Analysts had expected a draw of 2.2 million barrels.

Official U.S. inventory data from the Energy Information Administration is due on Thursday, delayed by a day due to the U.S. holiday.

Paraphrasing text from "Investing" all rights reserved by the original author.