European Shares Likely To Open On Firm Note

(RTTNews) - European stocks may open on a positive note on Wednesday, though regional gains are likely to remain capped amid bets that the U.S. Federal Reserve may have to raise interest rates next year.

After U.S. headline inflation came in above market expectations, investors now await the producer price index reading later in the day and retail sales figures on Thursday to evaluate the impact of elevated energy prices on the world's largest economy.

Closer home, EU employment, GDP and industrial production data will be in the spotlight later today.

Meanwhile, ahead of U.S. President Donald Trump's upcoming summit with Chinese President Xi Jinping in Beijing from May 13-15, U.S. Treasury Secretary today praised Japan's economic resilience and touted coordination with Japan on tackling excessively volatile currency moves.

Asian markets were mixed due to fading momentum in artificial intelligence- related stocks.

The U.S. dollar held near a one-week high as investors assessed the path for interest rates under new leadership.

Gold was little changed above $4,700 an ounce after stronger U.S. CPI data pushed the two-year U.S. Treasury yield to nearly 4 percent and the 30-year yield to 5.03 percent.

Brent crude futures fell more than 1 percent toward $106 a barrel after a three-day rally.

Progress toward a U.S.-Iran peace agreement remains limited, with U.S. President Trump saying he doesn't need China's help to end the Iran war.

U.S. crude oil inventories fell for a fourth straight week in the week ended May 12, according to estimates released by the American Petroleum Institute.

Distillate inventories also declined while gasoline stocks rose during the week, the report showed. Official data from the U.S. Energy Information Administration is due later in the day.

Overnight, U.S. stocks ended mostly lower as hotter-than-expected inflation data coupled with surging oil prices amid renewed concerns about the U.S.-Iran war fueled concerns about the economic outlook.

Data showed the annual consumer price inflation rose to 3.8 percent in April from 3.3 percent in March, exceeding economists' forecast of 3.7 percent and marking the highest reading since May 2023.

The tech-heavy Nasdaq Composite shed 0.7 percent and the S&P 500 dipped 0.2 percent while the narrower Dow inched up 0.1 percent.

European stocks ended lower on Tuesday as investors weighed political turmoil in the U.K. and U.S. President Trump's comments that the U.S.-Iran ceasefire is on "life support".

The pan-European STOXX 600 fell 1 percent. The German DAX slumped 1.6 percent, France's CAC 40 gave up 1 percent and the U.K.'s FTSE 100 finished marginally lower.