European stocks and U.S. equity futures in holding pattern, as investors wait for ECB and U.S. inflation

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© MarketWatch/Kollmeyer


© MarketWatch/Kollmeyer Pedestrians walk through Madrid’s Plaza Mayor on June 3, 2021.

European stocks and U.S. equity futures traded flat on Wednesday, a day ahead of key consumer prices Stateside, while a sharp rise in Chinese factory prices sent shares of miners lower. Airlines were among the gainers, after easing travel rules from the U.S.

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The Stoxx Europe 600 index was flat at 453.83, in a week that has seen the index rise about 0.3% so far. The German DAX slipped 0.1%, the French CAC 40 was flat, and the FTSE 100 index was down 0.3%.

U.S. stock futures pointed to a flat start for Wall Street. On Tuesday, the S&P 500 index and Nasdaq Composite closed slightly higher, as markets adopted a wait-and-see mode ahead of Thursday’s crucial consumer-price data for May.

A much sharper-than-expected rise in April prices last month temporarily shook up markets. Investors are waiting to see if strong inflation data will prompt the Federal Reserve to pull back on its accommodative monetary stance, which could turn into a headwind for stocks.

While inflation is rising at a far less heated pace in the eurozone, markets will be closely watching Thursday’s European Central Bank monetary policy decision, particularly to see if the central bank will keep its current pace of bond purchases intact.

Fresh signs of global pricing pressures emerged from China on Wednesday, after factory-gate prices rose in May at their highest pace in nearly 13 years, driven by surging global commodity prices. China’s consumer inflation remained tame in May, thanks to subdued food prices.

Mining stocks responded to the Chinese data with losses, with shares of heavily weighted Rio Tinto Anglo American and Glencore all down by more than 1%.

Travel-related stocks were on the rise, after the U.S. Centers for Disease Control and Prevention eased travel restrictions for several European countries, including France, Spain and Italy, which are now Level 3, which means Americans can travel to those countries but must be fully vaccinated. The U.S. recommends against travel to countries with Level 4 ratings.

Shares of Aéroports de Paris Air France-KLM and Deutsche Lufthansa rose by more than 2%. Shares of International Consolidated Airlines easyJet and Wizz Air all rose by more than 1%.

Shares of Spain’s Industria de Diseño Textil which is known as Inditex and owns Zara and other clothing chains, fell 1%. The retailer said it swung to a net profit for the first quarter of the fiscal year, as sales returned to growth.

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