Ahead of CPI, Stocks Rise with Fed Rates in Sight – Europe Market Wrap

Stocks advanced ahead of Thursday’s highly anticipated inflation report, which is expected to shape expectations for the Fed’s interest rate path this year.

S&P 500 futures climbed 0.2% following two consecutive all-time highs. European stocks rose 0.3%, led by construction and retail firms. The Dollar strengthened. Treasuries remained stable, with the 10-year yield at 4.04%.

Expectations that the Fed will resume monetary easing this month have risen in recent weeks, as data show the US labour market is under strain. Wednesday’s unexpected drop in producer inflation reinforced the perception that tariffs are not putting undue pressure on pricing.

Policymakers at the ECB are anticipated to hold interest rates unchanged later on Thursday, with experts expecting no additional cuts this cycle. Economists expect new quarterly predictions to alleviate concerns about inflation remaining below 2%.

Brent crude fell towards $67 per barrel on projections of a record surplus next year. While the IEA upgraded its global oil demand projections somewhat through 2026, it increased supply expectations considerably further.