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European stock markets rose Wednesday, with Paris and Frankfurt setting new records, while Wall Street churned after rising the previous day despite a mixed inflation report.
Bitcoin struck a fresh record above $73,000 before giving up much of its gains, while oil rose on reports of declining US stockpiles and as Ukraine hit Russian refineries.
Even though inflation rose faster than expected in Tuesday's latest US consumer prices report, it wasn't enough to change investors' outlook that the Federal Reserve will cut interest rates in June and stocks jumped Tuesday.
"For the Fed, the reading doesn’t provide them with enough evidence to have 'confidence' to cut rates, but it also isn’t probably too disturbing given the noise in the data," said Kathy Jones, chief fixed income strategist at Charles Schwab.
But Wednesday, US shares struggled to hold onto those gains with the Dow up slightly and the broader S&P 500 index and the tech-heavy Nasdaq Composite down slightly in midday trading in New York.
The S&P 500 is up about nine percent from the start of the year and up 34 percent from a year ago, and the market may churn around these levels until it gets fresh insight into the Federal Reserve's outlook on inflation, said Chris Beauchamp, an analyst at IG.
"The rally in stocks has moved into a choppier phase, a change from the relentless gains of the fourth quarter of 2023, and the sideways price action could intensify as we begin the run towards next week’s Fed decision," Beauchamp said.
Thursday will see the release of US retail sales and producer prices data, before the Fed's policy-making council meets next week. Most investors don't expect any change next week, but foresee a first interest rate cut in June.
Frankfurt's DAX 40 index briefly struck an all-time pinnacle above 18,000 points as speculation mounted that the European Central Bank could join the Fed and lower borrowing costs in June, while the CAC 40 in Paris also set a new intraday record.
London rose as official data showed the UK economy expanded 0.2 percent in January after a moderate contraction in December.
"There is growing evidence that the UK is emerging from its technical recession, although it’s hard to say that the economy is bouncing back," said Kathleen Brooks, an analyst at XTB.com.
Bitcoin surged to a new high of $73,664 to extend its blistering run, propelled partly by global moves to increase trading access to the world's biggest cryptocurrency.
- Key figures around 1645 GMT -
New York - Dow: UP 0.4 percent at 39,158.04 points
New York - S&P 500: DOWN 0.1 percent at 5,168.98
New York - Nasdaq Composite: DOWN 0.5 percent at 39,179.60
London - FTSE 100: UP 0.3 percent at 7,772.17 (close)
Paris - CAC 40: UP 0.6 percent at 8,137.58 (close)
Frankfurt - DAX: FLAT at 17,961.38 (close)
EURO STOXX 50: UP 0.4 percent at 5,00.55 (close)
Tokyo - Nikkei 225: DOWN 0.3 percent at 38,695.97 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 17,082.11 (close)
Shanghai - Composite: DOWN 0.4 percent at 3,043.83 (close)
Euro/dollar: UP at $1.0945 from $1.0930 on Tuesday
Dollar/yen: UP at 147.74 yen from 147.67 yen
Pound/dollar: UNCHANGED at $1.2795
Euro/pound: UP at 85.55 pence from 85.41 pence
Brent North Sea Crude: UP 2.1 percent at $83.62 per barrel
West Texas Intermediate: UP 2.3 percent at $79.31 per barrel
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