Traders at the New York Stock Exchange experienced a bustling session on a Wednesday that marked a positive start for European stocks. The pan-European Stoxx 600 index climbed 0.8% by 2:30 p.m. in London, equivalent to 9:30 a.m. ET, as investors absorbed fresh insights from the latest U.K. inflation figures and the broader global market landscape. Major European exchanges and most sectors saw upward momentum during the day.
However, not all companies shared in this optimism. German life sciences giant Bayer faced a significant downturn, with shares declining by 8.6%. This drop followed the company’s announcement regarding a proposed $7.25 billion settlement of lawsuits related to its Monsanto Unit. Plaintiffs in these lawsuits allege that the herbicide Roundup is linked to cancer. Bayer indicated in a press release that it anticipates an increase in its provisions and litigation liabilities, forecasting these to rise from 7.8 billion euros ($9.24 billion) to 11.8 billion euros, which includes an expected 5 billion euros in litigation-related expenses for 2026. The company also warned of a negative free cash flow for the current fiscal year.
On the inflation front, the U.K. reported a decrease in the inflation rate to 3% for January, as per the Office for National Statistics. This figure matched economists’ expectations surveyed by Reuters, which had anticipated a drop from the previous month’s rate of 3.4%. David Smith, a portfolio manager at Henderson High Income Trust plc, commented on the significance of this data, suggesting it reflects a shift in the inflationary landscape. He projected that U.K. inflation could slide to 2% by year-end, potentially paving the way for further interest rate reductions by the Bank of England.
The British Pound traded slightly lower, down 0.2% against the U.S. dollar, settling at $1.3541. Government bond yields, or gilts, in the U.K. remained stable throughout the day. On the previous day, sterling dipped, and British government bond yields decreased as the unemployment rate surged to a five-year peak alongside slower wage growth.
In the earnings landscape, key reports were scheduled for release from major firms including Glencore, BAE Systems, Orange, and Euronext. In Asia, stocks tended to rally overnight even as several markets remained closed due to the Lunar New Year holidays in mainland China, Hong Kong, Singapore, Taiwan, and South Korea.
On Wall Street, early trading on Wednesday saw the S&P 500 advance 0.2%, with traders keenly awaiting the minutes from the Federal Reserve’s January meeting. Looking ahead, the upcoming release of the personal consumption expenditures (PCE) price index on Friday is expected to serve as a crucial indicator, providing deeper insight into the economic landscape and the Fed’s future monetary policy decisions.
