Stocks Pause as China Bump Fades Ahead of US CPI: Markets Wrap

(Bloomberg) -- Global equities stalled Tuesday as the impetus from China’s latest stimulus pledge faded and traders await key US inflation data later this week.

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Contracts on the S&P 500 and Nasdaq 100 were steady, while Europe’s Stoxx 600 index snapped an eight-day streak of gains. European miners and luxury names retreated, a day after the sectors were boosted by Beijing’s pledge for looser monetary policy. The moves follow a lackluster session in Asia, where Chinese shares opened firmer, only to cede most of the gains by the close.

Software maker Oracle Corp. was a key premarket US mover, shedding as much as 8.8% after second-quarter results underwhelmed. Nvidia Corp. looked set to extend losses following news that China is probing the AI chipmaker over alleged anti-monopoly violations. In Europe, Delivery Hero SE sank as Talabat Holding Plc, its Middle Eastern unit, turned negative in its trading debut. Ashtead Group Plc shares dropped after the industrial-equipment rental firm proposed moving its primary listing to the US from London.

Investors are marking time ahead of Wednesday’s consumer price index print in the US, the final major price reading before the Federal Reserve’s policy meeting. Any indication that progress has stalled on the inflation front could well undercut the chances of a third straight reduction in rates. Bloomberg’s Dollar Spot Index and Treasury yields edged modestly higher.

“Markets seem to have run out of steam going into the end of the year and participants are waiting some kind of fresh catalyst,” said Lee Hardman, a strategist at MUFG Bank Ltd.

Turning the upcoming inflation data, Hardman noted that even a relatively robust monthly payrolls reading had not derailed bets on further policy easing.

“It would have to be a really bad CPI report tomorrow to make the market pare back expectations for a cut this month. You have to assume if it comes in in line with expectations, it’s not going to really alter the view,” he said.

The week is a major one for policy making, with the European Central Bank expected to cut rates for the fourth time this year, amid a deteriorating economic outlook and political turmoil in France and Germany. The Swiss National Bank is also forecast to trim rates on Thursday.

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