Investing.com - European equity indices moved lower on Wednesday after recent gains, as investors digested more corporate earnings and key inflation data.
The DAX index in Germany closed 0.4% lower, while the CAC 40 in France declined 0.5% and the FTSE 100 in the U.K. fell 0.2%.
Volatility wanes
The news of a trade deal between China and the U.S., the two largest economies in the world, has seen most major equity markets claw back the losses they suffered in the wake of U.S. President Donald Trump announcing his tariff plans.
U.S. stocks have returned to positive territory for the year, while European shares are now a shade higher than on April 2, the so-called “Liberation Day”.
Volatility is dropping as a result as trading returns to a more even keel, with investors turning their attention to more regular matters, such as incoming economic data and quarterly corporate results.
German inflation eased in April
German inflation eased further to 2.2% in April, the federal statistics office said on Wednesday, confirming preliminary data.
German consumer prices, harmonised to compare with other European Union countries, had risen by 2.3% year-on-year in March.
The equivalent Spanish data is due later in the session, ahead of French inflation numbers and eurozone growth data for the first quarter on Thursday
The European Central Bank has cut interest rates seven times in the past year, and is widely expected to continue this cycle at its next meeting in early June.
There is room for another rate cut by the European Central Bank by the summer, ECB policymaker Francois Villeroy de Galhau said in a French newspaper group interview on Tuesday.
Villeroy - who is also head of the Bank of France - said the United States would likely see an uptick in inflation from President Donald Trump’s tariffs, but Europe should be spared.
"We also don’t see inflation picking up. The Trump administration’s protectionism will lead to a restart of inflation in the United States, but not in Europe, which will likely allow for another rate cut by the summer," he told the EBRA newspaper group.
Burberry ’s Q4 sales impress
The tech sector is likely to be in the spotlight in Europe Wednesday, after U.S. chip firms Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) announced huge artificial intelligence deals in the Middle East.
Elsewhere, British luxury brand Burberry (LON:BRBY) reported better-than-expected fourth-quarter sales and adjusted operating profit for its full year.
E.ON (ETR:EONGn) posted an 18% increase in adjusted Ebitda in the first quarter of 2025, as higher investments and improved operating performance lifted earnings across all of the German electric giant’s core business segments.
Ferrovial (BME:FER) posted a 19% rise in first-quarter core earnings, with the Spanish construction giant helped by a strong performance in its toll highway business in the United States.
Lundbeck (CSE:HLUNb) raised its full-year revenue and earnings guidance after the Danish pharmaceutical company reported a 16% increase in first-quarter revenue.
Spanish telecom company Telefonica (NYSE:TEF) reported a hefty first-quarter net loss, following a write-down of the value of its units sold in Peru and Argentina.
Alstom (EPA:ALSO) forecast a rise in its adjusted operating margin for the 2025/26 financial year, after the French train maker reported an annual free cash flow well above market expectations.
Crude slips on U.S. inventories gain
Oil prices edged lower Wednesday from the recent two-week high after a sharp jump in U.S. oil inventories raised demand concerns.
At 11:57 ET, Brent futures slipped 0.8% to $66.07 a barrel, and U.S. West Texas Intermediate crude futures fell 0.8% to $63.19 a barrel.
U.S. crude stocks rose 4.3 million barrels in the week ended May 9, according to data from the industry body American Petroleum Institute, released on Tuesday.
Official weekly inventory figures from the U.S. Energy Information Administration are due later in the session, and could indicate that the demand side is still grappling with significant challenges.
Both benchmarks had climbed more than 2.5% in the previous session, adding to Monday’s gains, after China and the U.S., the two largest crude consumers, agreed to pause their trade war for at least 90 days while cutting their respective tariffs.