Global markets cautious, Europe indices pause after rally

by Jonathan Adams
Global stock markets

London, Paris and Frankfurt closed slightly down after ending at all-time highs on Friday

Global markets were in cautious mode Monday with Wall Street marking time while major European stock indices paused after a record run last week as investors awaited key US inflation data.

London, Paris and Frankfurt closed slightly down after ending at all-time highs on Friday.

On Wall Street, the S&P 500 closed unchanged, while the Dow Jones inched lower and the Nasdaq increased modestly.

The biggest developments in US equities were huge jumps by so-called meme stocks GameStop and AMC Entertainment after the reemergence of “Roaring Kitty,” a social media figure whose posts helped spark a massive rally in a handful of stocks in January 2021.

World markets rallied last week on hopes that the US Federal Reserve, the European Central Bank and the Bank of England will soon reduce borrowing costs after hiking them in efforts to contain surging prices.

Investors will pore over two sets of US inflation data for April – the producer price index (PPI) on Tuesday and the consumer price index (CPI) on Wednesday – for new clues about the Federal Reserve’s monetary policy outlook.

This week’s US inflation updates are likely to be the drivers of equity market direction, according to David Morrison, senior market analyst at Trade Nation.

If the numbers suggest that inflation is continuing to push higher, then that will reduce the probability of rate cuts this year, he said.

An uptick in inflation in recent months has dented hopes that the Federal Reserve will start cutting rates as soon as June, and odds-makers now see the possibility of it happening in September.

This week’s figures “will provide substantial insights into the likely duration of elevated interest rates,” according to Fawad Razaqzada, analyst at City Index and

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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