European Shares Set To Drift Lower After Powell Comments

(RTTNews) - European stocks may open on a sluggish note Friday after Federal Reserve Chair Jerome Powell signaled a cautious approach on rate cuts, given persistent inflationary pressures.

Asian stocks traded mixed, with Japanese markets leading regional gains as weak GDP data dampened expectations for more rate hikes by the Bank of Japan.

Chinese stocks were declining on concerns around slowing economic growth. The dollar held gains to hover near one-year highs on expectations of a hawkish Trump presidency, with focus on expected changes in trade and tariff policy.

Gold edged up slightly after falling over 1 percent on Thursday to hit a two-month low. Oil prices were down about 1 percent due to concerns over oversupply and a stronger dollar.

In economic releases, trading later in the day may be impacted by reaction to the latest U.S. economic data, including reports on retail sales and industrial production.

Data showed earlier today that China's industrial output expanded at a slower-than-anticipated 5.3 percent in October, while retail sales jumped an annual 4.8 percent to surpass expectations boosted by a week-long holiday and the annual Singles' Day shopping festival.

Property investment fell 10.3 percent year-on-year in January-October and fixed asset investment growth in the first ten months of 2024 came in below expectations, keeping alive calls for Beijing to unveil more stimulus.

U.S. stocks ended lower overnight after data showed producer price inflation rose in October and Fed Chair Jerome Powell said the U.S. central bank does not need to rush to lower interest rates and can approach decisions carefully.

Data showed a higher-than-expected annual wholesale inflation rate of 2.4 percent in October, marking the highest level in three months.

Weekly jobless claims fell last week, suggesting the weak October government payrolls report was an anomaly.

Powell lauded the economy as "remarkably good", the labor market as "solid" and noted that inflation was "running much closer" to the bank's target.

The Dow dipped half a percent while the tech-heavy Nasdaq Composite and the S&P 500 both shed around 0.6 percent.

European stocks closed higher on Thursday after the release of Eurozone GDP and employment data.

The pan European STOXX 600 gained 1.1 percent. The German DAX rallied 1.4 percent, France's CAC 40 climbed 1.3 percent and the U.K.'s FTSE 100 added half a percent.