European Markets Slip as Investors Await Nvidia Earnings and UK Inflation Cools
European markets were on track for a cautious start Wednesday as investors turned their focus to Nvidia’s highly anticipated earnings report. With global tech stocks under renewed pressure, traders across Europe adopted a wait-and-see approach, reflecting the fragile sentiment surrounding the AI-driven rally that has dominated markets this year.
Early projections showed the U.K.’s FTSE opening flat, while Germany’s DAX was expected to dip 0.2%. France’s CAC 40 forecasted a slight 0.11% drop, and Italy’s FTSE MIB looked marginally higher, according to figures from IG. Across global indexes, investors have grown increasingly uneasy about stretched valuations in AI-related stocks, prompting several sessions of selling this week.
U.S. futures also remained muted overnight after Wall Street suffered another tech-led decline on Tuesday. Much of the market’s uncertainty centers on Nvidia’s results, due after the U.S. market closes. Analysts expect another strong quarter driven by intense demand for the company’s AI chips, but Nvidia faces the challenge of satisfying sky-high investor expectations after months of accelerated growth.
Meanwhile, fresh data from the U.K. added another layer to the day’s market drivers. The country’s annual inflation rate cooled to 3.6% in October, raising hopes of a potential interest rate cut from the Bank of England before Christmas. The report, released just one week ahead of the government’s Autumn Budget, aligned perfectly with economist forecasts. The pound held steady against both the U.S. dollar and euro after the release, while gilt yields edged slightly lower.
Economists say the softer inflation print could influence the Bank of England’s next move. Deutsche Bank’s Chief U.K. Economist Sanjay Raja noted that weakening labor data, slower GDP growth, and easing core inflation could give Governor Andrew Bailey greater confidence to push for a rate cut below 4%. With Britain still carrying the highest long-term borrowing costs among G-7 nations, any shift in monetary policy will be watched closely by households, businesses, and global markets alike.
source: cnbc