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Investing.com - European equity indices were mixed on Friday, even after a U.S. court reinstated President Donald Trump’s tariffs, with weak regional inflation data hinting at more interest rate cuts by the European Central Bank.
The DAX index in Germany closed 0.1% higher, the CAC 40 in France fell 0.4% and the FTSE 100 in the U.K. rose 0.7%.
These stock indices are all on course for health gains this month, with the DAX leading the way. The German benchmark is on course for a monthly advance of over 7%, climbing to a record high, capitalising on easing trade tensions and the recent U.S. fiscal concerns that forced investors to move away from American assets.
ECB cut next month likely
Spain’s European Union-harmonised 12-month inflation rate fell in May to its lowest level since October, according to data released earlier Friday, while data from a series of German states also pointed to weakening inflationary pressures in the eurozone’s largest economy.
At the same time, German retail sales fell by 1.1% in April compared with the previous month, data showed on Friday.
Subdued economic activity and cooling inflation point to another rate cut by the ECB when it next meets on June 5, with financial markets expecting that it would lower its key deposit facility rate to 2.00% from 2.25%.
Such a move would mark the ECB’s eighth rate cut in a row.
Trump’s tariffs reinstated
Uncertainty over the Trump administration’s trade policies have increased after an appeals court reinstated his tariffs, just a day after the U.S. Court of International Trade ruled his tariff agenda invalid.
The next hearing on the case is scheduled for June 5, before likely ending up in the Supreme Court in time. This just adds to the general air of wariness, further pushing out decisions on hiring, spending or even cutting rates.
Sanofi (NASDAQ:SNY) suffers drug trial blow
In the corporate sector, shares in Sanofi (EPA:SASY), as well as partner Regeneron (NASDAQ:REGN), slumped after the French pharmaceutical giant reported disappointing results from two phase 3 trials of their investigational chronic obstructive pulmonary disease treatment, Itepekimab.
M&G (LON:MNG) stock soared after saying that Japanese life insurer Dai-Ichi Life Holdings will take a 15% stake in the British insurer and asset manager as part of a strategic deal.
Crude awaits crucial OPEC+ meeting
Oil prices are down so far on Friday, on course for a weekly loss as traders await confirmation of another OPEC+ output hike amid heightened uncertainty over President Trump’s trade tariffs.
At 11:48 ET, Brent futures has declined 1.5% to $62.42 a barrel, and U.S. West Texas Intermediate crude futures slipped 1.1% to $60.28 a barrel.
Both benchmarks are on track for losses this week, potentially a second consecutive losing week as uncertainty over Trump’s tariffs and their economic impact weighed on the outlook for demand.
Oil prices have lost more than 10% since Trump announced his "Liberation Day" tariffs on April 2.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, is set to meet on Saturday, with the members expected to authorize another bumper production increase for July after agreeing 411,000 barrels-per-day hikes at the previous two meetings.