TLDR
- July U.S. inflation data met expectations, lowering likelihood of Federal Reserve rate increase in September
- Major European indices posted gains, with FTSE 100 climbing 0.6%, while DAX and CAC 40 advanced 0.3%
- British economy expanded 0.4% during second quarter, in line with predictions
- Crude prices retreated slightly while maintaining levels above $80 per barrel as U.S.-Iran geopolitical tensions persist
- Pandora stock surged almost 3% following stronger-than-anticipated Q2 results
European equity markets posted broad gains Thursday following the release of U.S. inflation figures that aligned with analyst expectations, diminishing the probability of a Federal Reserve interest rate increase at its September policy meeting.
The benchmark Stoxx Europe 600 Index advanced 0.2%, extending its climb toward all-time highs. The positive momentum was evident across multiple European bourses.
Frankfurt’s DAX and Paris’s CAC 40 both registered gains of 0.3%. Meanwhile, London’s FTSE 100 led regional performance with a 0.6% advance, buoyed by encouraging domestic economic statistics.
The market optimism followed Wednesday’s release of the U.S. Consumer Price Index, which revealed headline inflation increased just 0.1% on a monthly basis during July. Core inflation remained unchanged at 2.5% compared to the previous year.
Investor sentiment had been fragile following the previous week’s disappointing U.S. employment figures. Thursday’s stable inflation print helped restore confidence among market participants.
Futures markets swiftly adjusted expectations following the inflation release. The likelihood of a 25-basis-point Federal Reserve rate increase at the September 16 policy gathering fell to approximately 40%, down sharply from nearly 67% recorded seven days earlier.
“The US July CPI number offered up nothing in the way of a surprise,” said Sam Hill, head of market insights at Lloyd’s Bank. “It is hard to see a September hike on that basis.”
British Economy Posts 0.4% Expansion in Second Quarter
The United Kingdom’s economy registered growth of 0.4% during the April-June period, precisely matching economist projections. The expansion was primarily fueled by robust performance across consumer-oriented service industries.
While the figure represented a modest deceleration from the first quarter’s 0.5% growth rate, it proved sufficient to bolster confidence in British assets. The data provides the Bank of England with flexibility to maintain a measured approach toward potential rate reductions without needing to address immediate recession concerns.
The encouraging GDP release provided additional lift to the FTSE 100, with industrial companies and domestic banking institutions among the primary beneficiaries.
Energy Prices Ease, Corporate Results Under Spotlight
Crude oil prices retreated Thursday from recent multi-week peaks but maintained support above the $80 per barrel threshold. Market participants remained focused on escalating tensions between Washington and Tehran concerning Strait of Hormuz navigation rights, which continues to sustain an elevated risk premium in energy valuations.
On the corporate front, shares of Pandora jumped nearly 3% after the Danish jewelry retailer surpassed second-quarter profit expectations and upgraded its annual forecast.
German industrial conglomerate Thyssenkrupp declined 1.5% despite tightening its 2026 guidance range. Danish shipping giant Maersk lifted its full-year underlying EBITDA projection above consensus estimates.
Market attention also turned toward upcoming releases including Eurozone manufacturing output data for June and Spain’s finalized July consumer price statistics, both scheduled for later Thursday.
Additional companies preparing to announce quarterly results included German utilities E.On and RWE, Chilean mining firm Antofagasta, footwear manufacturer Birkenstock, and frozen food producer Nomad Foods.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
