U.S. inflation data falls to a four-year low, European stocks react differently: London edges down, Frankfurt and Paris edge up.

Taiwan • Business • 05/13 18:31
U.S. inflation data falls to a four-year low, European stocks react differently: London edges down, Frankfurt and Paris edge up.

On May 13, 2025, European stock markets had mixed performances after the U.S. April CPI annual growth rate fell to 2.3%. The London FTSE 100 index dipped slightly by 0.02% due to a slowdown in the UK labor market affecting market confidence. Meanwhile, the Frankfurt DAX and Paris CAC 40 indices rose by 0.31% and 0.30%, respectively, boosted by a temporary reduction in tariffs between the U.S. and China and expectations for a rate cut by the European Central Bank. Markets remain cautious about the global economic outlook, reflecting a cautious, wait-and-see attitude amid the interplay of multiple factors.

Key Updates

05/15 08:26

Trump Announces "Tariff Freedom Day": S&P 500 Strongly Rebounds, Retail Investors Cause Significant Market Fluctuations

On April 9, 2025, President Trump of the United States announced "Tariff Liberation Day," significantly lowering tariffs on Chinese goods and reached an agreement with China to suspend the trade war for 90 days. This policy shift caused market fluctuations, with the S&P 500 index initially dropping and then rising, resulting in an "artificial bull market." The CNN Fear and Greed Index surged to 70, indicating that market sentiment had shifted into the greed zone. This article examines the impact of the policy shift on the stock market and how retail investors dominated the market rebound.

05/15 02:25

US stocks experience slight fluctuations: AI deal boosts tech stocks, the S&P 500 rises for six consecutive days, Treasury yields break through 4.5%

On May 14, 2025, the major U.S. stock indices were mixed. The S&P 500 index rose for the sixth consecutive day, boosted by the AI cooperation agreement between the U.S. and Saudi Arabia, as technology stocks performed strongly. The Nasdaq index also rose, while the Dow Jones index slightly declined. The yield on the 10-year U.S. Treasury note rose to 4.53%, indicating increased pressure in the bond market. Investors are focusing on the forthcoming economic data and remarks from Federal Reserve Chairman Powell to evaluate future policy directions.

05/14 18:56

U.S. stocks opened higher due to trade optimism: the pause in U.S.-China tariffs and easing inflation are boosting the three major indexes.

On May 14, 2025, the U.S. stock market continued its upward trend from earlier this week due to positive news such as the U.S.-China tariff suspension, cooling inflation data, and Trump's visit to the Middle East. The Dow Jones Industrial Average rose by 9.7 points, the S&P 500 rose by 10.2 points, and the Nasdaq rose by 64.6 points. Technology stocks performed strongly, particularly AI-related companies, leading to a positive shift in market sentiment.

05/14 18:27

European stock markets decline: Optimism regarding US-China trade relations diminishes, policy easing does not boost investor confidence

On May 14, 2025, major European stock markets ended lower as optimism among investors about easing US-China trade tensions waned. The London FTSE 100 index dropped 0.21%, the Frankfurt DAX index dropped 0.47%, and the Paris CAC 40 index fell 0.47% as well. Even though the Chinese Ministry of Commerce announced a temporary lift on export controls for 45 US entities, market reactions showed that this short-term policy relief did not boost investor confidence.

05/14 07:27

U.S. stock futures slightly rise: Dow Jones Industrial Average surpasses 42,200 points, indicating stable sentiment in Asian markets

On May 14, 2025, at 12:33 PM Taipei time, futures for the three major U.S. stock indices slightly increased. Dow Jones Industrial Average futures rose 21 points to 42,249, S&P 500 futures increased by 2.75 points to 5,907.25, and Nasdaq 100 futures went up by 20.5 points to 21,298.5. This indicates stable market sentiment during the Asian trading session, as investors focus on global economic and corporate earnings developments.

05/13 18:31

U.S. inflation data falls to a four-year low, European stocks react differently: London edges down, Frankfurt and Paris edge up.

On May 13, 2025, European stock markets had mixed performances after the U.S. April CPI annual growth rate fell to 2.3%. The London FTSE 100 index dipped slightly by 0.02% due to a slowdown in the UK labor market affecting market confidence. Meanwhile, the Frankfurt DAX and Paris CAC 40 indices rose by 0.31% and 0.30%, respectively, boosted by a temporary reduction in tariffs between the U.S. and China and expectations for a rate cut by the European Central Bank. Markets remain cautious about the global economic outlook, reflecting a cautious, wait-and-see attitude amid the interplay of multiple factors.

05/13 17:25

Soft U.S. inflation data and easing U.S.-China trade tensions boost the S&P 500 and Nasdaq.

On May 13, 2025, the U.S. stock market rose due to the annual growth rate of the April CPI dropping to 2.3% and the easing of trade tensions between the U.S. and China. The S&P 500 and Nasdaq indices increased by 0.9% and 1.49%, respectively. The U.S. and China announced a suspension of some tariffs and significantly reduced tariff rates, which boosted market confidence. Technology stocks led the gains, with the Nasdaq entering a technical bull market. The yield on the U.S. 10-year Treasury bond declined, and the dollar index fell, indicating increased expectations of a shift in Federal Reserve policy.

05/13 10:59

Futures for the three major U.S. stock indices simultaneously declined: Dow futures fell more than 90 points as investors pay attention to inflation data.

On the afternoon of May 13, 2025, futures for the three major U.S. stock indices declined. Dow Jones Industrial Average futures dropped 93 points to 42,400, S&P 500 futures fell 19.25 points to 5,845.75, and Nasdaq 100 futures decreased 85.75 points to 20,863. The market was cautious ahead of the U.S. stock market opening, as investors focused on upcoming U.S. inflation data and economic indicators, which could impact the Federal Reserve's interest rate policy.

05/13 06:59

U.S. stock index futures decline: Market sentiment is cautious after the trade agreement, and the three major indices pull back from their highs.

After the US and China announced a 90-day tariff suspension agreement, US stocks surged early in the week. However, as of 1:30 PM Taipei time, May 13, 2025, US stock index futures retreated. Dow Jones Industrial Average futures fell 104 points to 42,389, S&P 500 futures dropped 20.5 points to 5,844.5, and Nasdaq 100 futures decreased 88.75 points to 20,860. Market sentiment turned cautious as investors reassess the real impact and risks of the trade agreement.

05/13 02:58

Shift in Trump's Tariff Policy: Taiwan Stock Market Rebounds Strongly, New Taiwan Dollar Sees Significant Volatility

Since April 2025, the Taiwan stock market has strongly rebounded, and the exchange rate of the New Taiwan Dollar against the US Dollar has fluctuated dramatically due to President Trump's adjustment of reciprocal tariff policy. On May 12, the US and China announced a significant tariff reduction to be implemented within 90 days, with US tariffs on Chinese goods reduced to 30% and Chinese tariffs on US goods reduced to 10%. This move alleviated global trade tensions and boosted the performance of the Taiwan stock market and the New Taiwan Dollar. Financial author Chen Chongming stated that although exchange rate fluctuations affect short-term returns, he remains confident in the long-term prospects of the semiconductor industry.

US Inflation Data Falls Short of Expectations, Market Reacts Cautiously

Data released by the US Bureau of Labor Statistics on Tuesday showed that the year-over-year increase of the CPI in April was 2.3%, below the market expectation of 2.4%, marking its lowest level since February 2021. The monthly increase was 0.2%, also below the expected 0.3%. The core CPI (excluding food and energy) maintained a year-over-year increase of 2.8%, meeting expectations, but the monthly increase was only 0.2%, slightly below market estimates.

This data indicates that US inflation pressure continues to ease, especially driven by a slowdown in energy and food prices. Energy costs decreased by 3.7% year-over-year, and the price increases for food and transportation also moderated. Housing costs remained stable with a year-over-year increase of 4%. These data further strengthen the market's expectation that the Federal Reserve may cut interest rates later within the year, leading to a decline in US Treasury yields and a weaker dollar.

However, although US stocks generally rose after the data release, the European market's reaction was more restrained.

London Stock Market Edges Down, Investor Sentiment Cautious

The London FTSE 100 index closed at 8,602.92 points on Tuesday, down 2.06 points, a decrease of 0.02%. Although the cooling US inflation data should have boosted the market, local UK economic data showed a slowdown in the labor market and a deceleration in wage growth, creating uncertainty about the Bank of England's future policy direction.

According to official UK data, the unemployment rate rose to 4.5% from January to March, higher than the previous quarter's 4.4%. Signs of slowing wage growth further weakened market confidence in corporate earnings prospects. Although some blue-chip stocks like gambling company Entain performed strongly, with a 5.7% increase in stock price, the overall market still lacked clear direction.

Frankfurt and Paris Stock Markets Edge Up

Unlike the London market, major stock markets on the European continent recorded slight increases. Germany's Frankfurt DAX index closed at 23,638.56 points, up 72.02 points, an increase of 0.31%; France's Paris CAC 40 index closed at 7,873.83 points, up 23.73 points, an increase of 0.30%.

Market analysis indicates that the rise in European stock markets was partly boosted by the temporary easing of US-China trade tensions. The US and China announced a temporary agreement on Monday, significantly reducing existing tariffs and suspending new tariff measures for 90 days. This announcement alleviated market concerns about the global trade outlook, benefiting export-oriented European economies.

Additionally, the European Central Bank has recently signaled a dovish stance, with the market widely expecting further interest rate cuts in June, providing some support for the stock market. However, investors remain cautious about the long-term sustainability of the European economic recovery, limiting the gains.

Market Sentiment Shaped by Multiple Factors

Although US inflation data shows that price pressures continue to ease, market reactions indicate that investors still have doubts about future economic trends. Besides the temporary nature of the recent US-China trade agreement, local European economic data also failed to provide clear direction.

In the UK, the slowdown in the labor market and deceleration in wage growth may prompt the Bank of England to consider cutting interest rates, but it also reflects insufficient economic momentum. Germany and France face challenges of weak manufacturing recovery and sluggish domestic demand.

Moreover, even though US inflation data fell below expectations, housing and core service prices remain sticky, and Federal Reserve officials remain cautious about whether to cut interest rates. This ongoing policy uncertainty also affects global market risk appetite.

References

People Also Ask...

faq

How does the temporary tariff reduction by the US and China affect the global economy?

faq

Why didn't European stock markets react as expected to the cooling of U.S. inflation data?

faq

Why did European stock markets have mixed reactions to the cooling U.S. inflation data?