Stock prices in the US and Europe rose on Thursday, but the US dollar fell after the release of better US inflation data, which raised hopes for a change in the US Federal Reserve’s (FRS) monetary policy.
US producer prices fell 0.5% in March from a month earlier after being flat in February. This decrease is mainly explained by the sharp drop in energy prices, according to data released by the US Department of Labor on Thursday.
Data were released on Wednesday that the annual inflation in the USA decreased to 5% in March compared to 6% in February, thus registering the lowest level since May 2021. However, excluding food and energy prices, annual inflation in the US was 5.6% in March compared to 5.5% in February, while monthly inflation was at the level of 0.4%.
“Inflation is trending lower,” said LBBW analyst Carl Hayling. “There is certainly optimism that the FRS rate hike cycle is coming to an end.”
All three major Wall Street indexes rose, with the Nasdaq Composite the fastest-growing at 2.0%, after gains in Apple, Netflix and other big tech companies.
In Europe, the Paris stock index CAC 40 posted the biggest gain of 1.1% after luxury goods giant LVMH reported strong first-quarter turnover. This helped the index hit a new record high for the third consecutive trading session.
The US dollar fell to its lowest level against the euro in over a year as market participants anticipated a change in FRS policy in the foreseeable future.
The Dow Jones Industrial Average rose 1.1% to 34,029.69 points on Thursday, the Standard & Poor’s 500 index rose 1.3% to 4,146.22 points, and the Nasdaq Composite index rose by 2.0% to 12,166.27 points.
London’s FTSE 100 rose 0.2% to 7,843.38 on Thursday, Frankfurt’s DAX rose 0.2% to 15,729.46 and Paris’ CAC 40 rose 1.1% to 7,480. 83 points.
WTI crude oil fell 1.3% to $82.16 a barrel in electronic trading on the New York Stock Exchange on Thursday. “Brent” crude oil price on the London exchange decreased by 1.4% to 86.09 dollars per barrel.
On the Dutch exchange “Title Transfer Facility” (TTF), the price of natural gas fell by 1.84% to 42.09 euros per megawatt hour on Thursday.
The euro rose against the US dollar on Thursday from $1.0992 to $1.1050/euro, the British pound against the US dollar rose from $1.2485 to $1.2526/pound, while the US dollar against the Japanese yen fell from 133.13 to 132.65 yen per dollar. The euro rose against the British pound from 88.04 to 88.20 pence per euro.
