by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to fall on Thursday, still affected by the offensive remarks of the chairman of the Federal Reserve in the face of the high level of inflation.

According to index futures, the Paris CAC 40 could drop 0.81% at the opening, the Dax in Frankfurt 0.71%, the FTSE in London 0.78% and the EuroStoxx 50 0.76 %.

Jerome Powell expressed Wednesday during a hearing in the House of Representatives the need to continue the fight against inflation, statements without surprise but which nevertheless dragged the equity markets into the red in Europe and the United States.

The Fed boss will be heard from 2:00 p.m. GMT before the Senate this time and he should not deviate from his remarks the day before.

“Clearly the Committee wants the market to understand that a hike will be discussed at the next meeting,” said Kevin Cummins, chief economist at NatWest Markets.

The other meeting of the day will take place at 11:00 GMT with monetary policy announcements from the Bank of England, which should continue to raise its key rate as the rise in prices excluding energy and food accelerated by 6.8% to 7.1% in May.

Economists polled by Reuters last week were unanimous in saying the BoE will hike its rate from 4.5% to 4.75%, a peak since 2008.

The decisions of the Swiss and Norwegian central banks on their rates are also expected during the day.

AT WALL STREET

The New York Stock Exchange ended lower on Wednesday after comments by Jerome Powell and the sharp decline in technology stocks.

The Dow Jones index fell 0.30%, or 102.35 points, to 33,951.52 points, the Standard & Poor’s 500 lost 23.02 points, or 0.52% to 4,365.69 points and the Nasdaq Composite fell 165.09 points (-1.21%) to 13,502.199.

Among the 11 major sectors of the S&P-500 index, the energy compartment rebounded 0.92% while technology (-1.41%) and communication (-1.36%) stocks rose. suffered the largest percentage declines.

Tesla (-5.46%) – penalized by Barclays’ move from “online weighting” to “underweight” – and artificial intelligence-related companies like Microsoft (-1.33%) and Nvidia (- 1.74%) fell.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei fell 0.92%, weighed down by stocks linked to semiconductors, while the broad Topix index (0.08%) ended up in positive territory thanks to the increase in mining values.

Chinese markets are closed for a public holiday.

EXCHANGES/RATES

The dollar is stable against other major currencies, including the euro, which stands at 1.0984.

On the bond side, the ten-year American is up slightly to 3.7364% and its German equivalent drops two basis points to 2.41%.

OIL

The oil market is losing ground, caught up in demand fears: Brent loses 0.44% to $76.78 a barrel and US light crude (West Texas Intermediate, WTI) 0.41% to $72.23 .

(Edited by Bertrand Boucey and Kate Entringer)

Copyright © 2023 Thomson Reuters