LONDON — European stock markets were higher Wednesday, with attention focused on earnings and central bank comments in the U.S.
The Stoxx 600 index was up by 0.45% at 8:45 a.m. BST, with most sectors nudging higher. Health-care stocks led gains, up 0.9%. Autos stocks were down by 0.46% after the release of grim PMI figures for Germany, which showed a deepening downturn in manufacturing output and plunge in business activity.
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.
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.
It will be hard for central bankers meeting at the Jackson Hole symposium not to rattle the bond market, Altaf Kassam, head of investment strategy and research at State Street Global Advisors, told CNBC’s “Squawk Box Europe.“
“What they’re desperate to avoid is a repeat of what happened in the early 80s where they called victory on inflation, started easing monetary policy and then inflation spiked back up in their face,” he said.
“If history rhymes, which it often does, we’re going to see them keep up the hawkish rhetoric, say that they’re not done yet and definitely leave room open for further rate hikes on a data-dependent basis.”