Daily summary: Inflation spooks US equities

• US inflation for April well above expectations

• European stocks mostly higher, US equities tumble

• Oil prices push higher, Brent and WTI up 1.5%

European stock indices finished Wednesday's session mostly higher. The German blue chip stock market index added 0.20% while French CAC 40 gained 0,19%. The British FTSE 100 rose 0.82% and returned above the 7,000 pts mark. On the other hand, inflation fears spooked US equites and major indices are currently trading lower. The S&P 500 (US500) slumps 1.70% while Nasdaq (US100) tumbles more than 2%. 

US inflation report was the most awaited event of the day. The data showed that inflation rose as much as 4.2% YoY in April, well above estimates. On the flip side, CPI data from European countries, released in the morning, was more or less in-line with expectations. US crude oil inventories fell less than expected (-0.43 mb vs exp. -2.82 mb). Oil prices continue to move higher with both Brent and WTI gaining roughly 1.50%. Precious metals fell sharply following US CPI data as US Treasury 10-year yield spiked to highest level since mid-April. 

As far as tomorrow’s European session is concerned, the calendar will be light. However, markets will pay attention to important set of data from the US - initial jobless claims and PPI inflation for April. As inflation gets more and more attention these days, the latter will certainly be closely watched.