Stock market today: World shares mixed after US inflation data ease rate hike worries

Shares opened mixed in Europe on Thursday after a day of gains in Asia following a highly anticipated report that showed a modest increase in inflation across the U.S. in August

The subdued increase in prices eased worries over the likelihood of another interest rate hike by the Federal Reserve, but overall market reaction was muted.

Germany’s DAX was down 0.2% at 15,626.43 and the CAC 40 in Paris lost 0.2% to 7,206.57. In London, the FTSE 100 gained 0.4% to 7,558.88.

The future for the S&P 500 edged 0.2% higher while that for the Dow industrials was up 0.1%.

In Asian trading, Tokyo’s Nikkei 225 surged 1.4% to 33,168.10. In Seoul, the Kospi jumped 1.5%, to 2,572.89.

Hong Kong’s Hang Seng index rebounded from earlier losses to pick up 0.2%, closing at 18,047.92. However, major Chinese real estate developer Country Garden’s Hong Kong-traded shares sank 4.6% ahead of a deadline for a bond repayment.

The Shanghai Composite index added 0.1% to 3,114.38, while in Australia, the S&P/ASX 200 advanced 0.6% to 7,186.50.

On Wednesday, the S&P 500 edged up 0.1% and the Dow Jones Industrial Average dropped 0.2%. The Nasdaq composite rose 0.3%.

The inflation report said U.S. consumers paid prices last month that were 3.7% higher than a year earlier, up from July’s inflation rate of 3.2% and slightly more than the forecasts for a 3.6% increase.

That’s discouraging for shoppers paying higher prices, but much of the acceleration was because of higher fuel costs. Underlying inflation trends indicated a continued moderation in price increases, economists said. Inflation has been generally cooling since peaking above 9% last year.

The inflation report was important because it will help steer what the Federal Reserve does next on interest rates. The Fed has already hiked its main rate to the highest level in more than two decades, which hurts prices for stocks and other investments, and the hope on Wall Street is that inflation has cooled enough for it to be done.

Even though economists are willing to ignore fuel costs when looking at inflation to find the underlying trends, households and companies don’t get the same luxury.

Stocks of airlines were some of the biggest losers in the S&P 500 after a couple warned of the hit to profits they’re taking because of higher costs.

On the winning end of Wall Street were high-growth stocks that could benefit if the Fed stops hiking interest rates. High rates hurt all kinds of investments, but they often most hurt technology companies and others promising big future growth.

Amazon climbed 2.6%, Microsoft gained 1.3%, and Nvidia rose 1.4%.

In other trading Thursday, U.S. benchmark crude oil added 67 cents to $89.19 per barrel in electronic trading on the New York Mercantile Exchange. It lost 32 cents on Wednesday.

Brent crude, the pricing standard for international trading, was up 65 cents at $92.53 per barrel.

The U.S. dollar slipped to 147.30 Japanese yen from 147.47 yen. The euro rose to $1.0737 from $1.0732.

Source: post