by Augustin Turpin

(Reuters) – European stock markets ended higher on Tuesday, while Wall Street was in clear positive territory at mid-session, as U.S. producer price data supported stocks, amid renewed optimism over upcoming rate cuts by the U.S. Federal Reserve. In Paris, the CAC 40 ended up 0.35 percent at 7,275.87. In Frankfurt, the Dax rose 0.45 percent and in London, the FTSE rose 0.30 percent.

The pan-European FTSEurofirst 300 index gained 0.55%, the Eurozone’s EuroStoxx 50 gained 0.48% and the Stoxx 600 gained 0.51%.

At the time of the European closing, the Dow Jones gained 0.53%, the Standard & Poor’s 500 1.08% and the Nasdaq Composite 1.76%.

The publication of a poor July employment report in the United States triggered a wave of panic on the markets last week, with investors worried about the American economic slowdown.

Investors, cooled by the latest data, are closely monitoring U.S. economic indicators this week for indications of the path of the Fed’s monetary policy, which will be unveiled in September.

The Labor Department’s statistics on PPIs in the United States for the month of July, which showed a less significant increase than expected over one month, a sign of an easing of inflationary pressures, thus revived stocks and anchored the indices in the green.

“This gives the Fed more room to lower rates later this year, which explains the market reaction right now,” said Dave Grecsek, managing director of investment strategy and research at Aspiriant.

Market participants expect interest rates to be cut by a total of 100 basis points by the end of 2024. 0#FEDWATCH

The next key indicator for the path of the Federal Reserve’s monetary policy, CPI inflation for July, will be released on Wednesday. French and British inflation figures, as well as those for GDP and industrial production in the euro zone, also on the agenda, are also likely to move the indices.

VALUES

Valneva jumped 7.8% after reporting a year-over-year decline in revenue but a profit, compared with a loss a year ago.

HelloFresh reported second-quarter core profit that beat expectations on Tuesday, soaring 19.3%.

TODAY’S INDICATORS

The UK unemployment rate unexpectedly fell in the three months to the end of June, while wage growth continued to slow.

Investor sentiment in Germany has fallen much more sharply than expected since the beginning of August, according to a monthly survey by the Zew Institute of Economic Research.

In the United States, the highly anticipated figures from the Labor Department on producer prices for July showed a less significant increase than expected over one month, a sign of easing inflationary pressures.

CHANGES

The dollar fell (-0.19%) against a basket of reference currencies, while the euro gained 0.17% to 1.0950 dollars.

RATE

Eurozone bond yields are stable, with the ten-year German Bund gaining 0.5 basis points (bps) to 2.1860%, and the two-year Bund gaining 0.3 bps to 2.3410%.

US bond markets fell, with the 10-year Treasury losing 4.2bp to 3.8674%.

OIL

Oil prices are falling as the International Energy Agency (IEA) lowered its demand growth outlook for 2025 on Tuesday, while OPEC did the same on Monday for 2024, with both organizations citing a slowdown in Chinese demand.

Brent fell 1.66% to $80.93 per barrel, while US light crude (West Texas Intermediate, WTI) lost 1.74% to $78.67.

(Written by Augustin Turpin, edited by Zhifan Liu)

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