European stock markets closed higher Wednesday, with attention focused on earnings and central bank comments in the U.S.
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The pan-European Stoxx 600 index ended up 0.4%, with most sectors and major bourses in positive territory. Utility stocks led the gains, up 1.1% as oil and gas stocks fell 1.1%.
Autos stocks ended the session down around 0.5% after the release of grim PMI figures for Germany, which showed a deepening downturn in manufacturing output and a plunge in business activity.
The euro was lower against the U.S. dollar and bonds rallied as PMIs also came in well below expectations for the eurozone, as services activity fell into decline.
Globally, investors will be poring over California-based chip designer Nvidia ’s results to see how it performs against high Wall Street expectations after a stellar first quarter, with analysts expecting volatility in the stock.
The company’s shares have soared nearly 200% this year on the buzz around its uses within artificial intelligence. European tech stocks have rallied this week, climbing 2% on Tuesday, as investors also assess Microsoft’s new bid to U.K. regulators for gaming giant Activision Blizzard, and chip firm Arm’s filing for a Nasdaq listing.
The rise in long-dated U.S. Treasury yields, with the yield on the benchmark 10-year note hitting its highest level since 2007, eased Tuesday. Yields were also lower early Wednesday.
Speculation continues around whether Federal Reserve Chair Jerome Powell will strike a noncommittal tone in his speech in Jackson Hole on Friday, or give market-moving comments that are more or less dovish than previously expected.
Richmond Fed President Thomas Barkin said Tuesday there are new signs of a “reacceleration scenario” for the U.S. economy — with inflation remaining high and the economy strengthening — that could could make the case for further interest rate hikes. Retail sales and consumer confidence both remain resilient in the U.S.
Barkin added the recent rise in Treasury yields did not give him reason to think the Fed had tightened financial conditions too far, and that a 10-year yield over 4% was “appropriate.”