Stocks retreated Wednesday in Europe and Asia and oil prices rose ahead of a key report on U.S. inflation that could sway the Federal Reserve’s future decisions on interest rates.
Germany’s DAX shed 0.5% to 15,636.61 and the CAC 40 in Paris declined 0.5% to 7,213.81. In London, the FTSE 100 edged 0.1% lower, to 7,518.23.
The futures for the S&P 500 and Dow industrials were virtually unchanged as investors awaited the latest monthly update on prices that U.S. consumers are paying across the country. Economists expect it to show that prices were broadly 3.6% higher last month than a year earlier.
Thursday will bring reports about inflation at the wholesale level and sales at U.S. retailers. Strong spending by U.S. households has helped keep the U.S. economy humming, but it could also be encouraging companies to keep trying to raise their prices further.
Stocks have been see-sawing in recent weeks amid the revived uncertainty about whether the Federal Reserve is done with its avalanche of hikes to interest rates. The central bank has already pushed its main interest rate to the highest level in more than two decades, trying to get inflation back down to its target of 2%.
High interest rates work to undercut inflation by slowing an entire economy and knocking down prices for stocks and other investments.
Inflation has subsided from a peak of more than 9% last year, but a recent surge in oil prices has undermined that process and could compel the Federal Reserve to act again to tame inflation, Stephen Innes of SPI Asset Management said in a commentary.
“This scenario underscores the delicate balance between energy costs, inflationary pressures, and the central bank’s monetary policy actions, which can have profound implications for the broader economic landscape,” he said.
In Asian trading, Hong Kong’s Hang Seng lost 0.1% to 18,009.22 and the Shanghai Composite index sank 0.5% to 3,123.07.
Japan’s Nikkei 225 index fell 0.2% to 32,706.52, while the Kospi in Seoul edged 0.1% lower, to 2,534.70. Australia’s S&P/ASX 200 gave up 0.7% to 7,153.90.
Shares rose in India and Taiwan but fell in Southeast Asia.
On Tuesday, the S&P 500 lost 0.6% and the Dow Jones Industrial Average slipped 0.1%. The Nasdaq composite dropped 1%.
Software giant Oracle helped lead tech stock losses, tumbling 13.5%, after reporting its revenue for the latest quarter fell just short of what analysts expected.
Apple dropped 1.8% after it unveiled the latest models of its phones and other devices. The stock had soared through much of this year, which is crucial for many investors because it has more sway than other stocks on the S&P 500 as Wall Street’s most valuable company. But it’s been struggling since the end of July and has reported three straight quarters where its revenue fell from year-earlier levels.
Alphabet, meanwhile, fell 1.2% as an antitrust trial against Google opened in a federal courthouse. It’s the biggest such trial since regulators took Microsoft to court in 1998. The U.S. government is accusing Google of abusing its position as the world’s dominant search engine and forcing consumers to settle for inferior search results.
In other trading Wednesday, U.S. benchmark crude climbed 68 cents to $89.52 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.55 on Tuesday.
Brent crude oil, the international pricing standard, picked up 64 cents to $92.70 a barrel.
The U.S. dollar rose to 147.24 Japanese yen from 147.08 yen late Tuesday. The euro slipped to $1.0740 from $1.0755.