03/05/2024
European shares fell slightly in their first May trading session on Thursday as investors returned from a mid-week holiday to gauge a slew of earnings after the Federal Reserve signalled a delay in U.S. interest rate cuts.
The pan-European STOXX 600 (.STOXX), opens new tab eased 0.2% after logging its first monthly decline this year in April.
Market sentiment has cooled as investors navigate risks surrounding the Middle East conflict, the European Central Bank's policy outlook beyond June, and the corporate earnings season.
European equities were closed due to the Labour Day holiday on Wednesday, a day that saw the U.S. Fed signal rates would stay higher for longer owing to recent disappointing inflation readings.
"Powell noted the uncertain path forward for U.S. inflation, our base case remains that inflation and economic growth will cool off, allowing the Fed to begin cutting rates in September," UBS analysts said in a note.
While investors are widely confident of an ECB interest rate cut in June, there is still a touch of uncertainty about the path beyond that. www.csg-asset.com