European stocks muted; Micron hits sentiment ahead of key US inflation release

Investing.com – European stock markets traded in a muted fashion Thursday, with a disappointing outlook from chipmaker Micron (NASDAQ:) weighing on sentiment ahead of the release of key U.S. inflation data.

At 04:30 ET (07:30 GMT), the in Germany traded 0.3% higher, the in France rose 0.1%, while the in the U.K. dropped 0.2%.

Micron outlook weighs on sentiment

European equity indices are struggling for direction Thursday, as investors await the release of important U.S.inflation data for more clues over the start of the Fed’s rate-cutting cycle.

Confidence has been hit by a negative reaction to a lackluster outlook from Micron, with the chipmaker often seen as an industry bellwether due to its exposure to varied chip types and customers.

US PCE release looms large

The European economic data slate Thursday includes eurozone confidence, services and economic sentiment surveys are due later in the session, and across the pond investors will have the chance to study the final U.S. release.

However, these releases are likely to be overshadowed by the reading, the Federal Reserve’s preferred inflation measure due on Friday.

The U.S. central bank kept the rates unchanged at its June meeting, but cut its forecast for interest rate cuts to one 25 basis point reduction by year-end, down from three in March, implying a potential hold until December. 

Fed officials have repeatedly called for more information to confirm that inflation has been tamed before they would vote for an easing of monetary policy.

Also of interest will be the first U.S. presidential debate later Thursday, with CNN hosting the event between Joe Biden and Donald Trump, as the November election draws nearer.

H&M expects June sales to fall

In the corporate sector,  H&M (ST:) stock slumped 14% after the world’s second-biggest listed fashion retailer reported a smaller-than-expected rise in March-May operating profit and said June sales were expected to fall.

Nokia (HE:) stock rose 0.2% after the telecommunications company said it had agreed to sell its submarine networks business ASN to the French state for E350 million (E1 = $1.0695), but that the deal would not impact its financial outlook.

Compagnie de Saint Gobain (EPA:) stock fell 0.3% after the French industrial giant announced plans to buy Dubai-based construction chemicals company FOSROC for around $1 billion to drive its international expansion.

Crude slips after a jump in US inventories 

Crude prices dipped lower Thursday, weighed by a surprise build in U.S. stockpiles which fuelled fears about slow demand from the world’s top oil consumer. 

By 04:30 ET, the futures (WTI) traded 0.1% lower at $80.82 per barrel, while the contract dropped 0.1% to $84.40 per barrel.

The U.S. reported a 3.6 million barrel jump in the country’s crude oil stocks last week, according to data released late Wednesday, disappointing the market which had expected a draw of 2.6 million barrels. 

More worrying was a 2.7 million barrel build in gasoline inventories, which indicated that fuel consumption remained weak even with the onset of the travel-heavy summer season.

The inventory build ramped up concerns that U.S. fuel demand was slowing, especially as the country grapples with sticky inflation and high interest rates.