European stocks fall as traders wait for tech earnings, Fed meeting
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PARIS, April 29 : European stocks fell in early trading on Wednesday as investors struggled to find direction ahead of earnings from major U.S. technology firms and the outcome of the Federal Reserve's latest policy meeting.
U.S. tech stocks slid in the previous session after a report that artificial intelligence company OpenAI had missed internal targets, raising broader concerns about the sustainability of the AI boom. The Iran war also weighed on sentiment as oil prices rose.
European indexes were mostly lower at 0918 GMT, with the STOXX 600 down 0.3 per cent and London’s FTSE 100 down 0.6 per cent.
Earnings from Microsoft, Alphabet, Amazon and Meta are due later in the session.
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Shaniel Ramjee, co-head of multi-asset investments at Pictet Asset Management, said investors would focus on capital expenditure plans from so-called hyperscalers, which operate vast data centres and AI infrastructure.
"What we saw yesterday, with OpenAI, was some questions regarding the targets, and potentially does that impact some of the spend. The market will be very carefully looking today at what the hyperscalers say about not only how much they want to spend, but where that money is coming from, how durable is that," he said.
IRAN WAR, OIL PRICE
Two months into the Iran war, there are few signs of an end. U.S. President Donald Trump said he was unhappy with Iran's latest proposal, and the Wall Street Journal reported he had told aides to prepare for an extended blockade of Iran's ports.
Oil prices rose more than 3 per cent, with Brent hitting a one-month high. Brent crude futures for June were last up 3.2 per cent at $114.82 a barrel, an eighth consecutive day of gains, while U.S. West Texas Intermediate futures were up 3.5 per cent at $103.42.
Analysts said the United Arab Emirates' decision to quit OPEC was unlikely to have a major near-term impact on prices, though it would weaken the oil producers' group. Russia said the move would boost output and lower prices over time.
Attacks on Gulf countries have subsided since a ceasefire on April 8.
FEDERAL RESERVE
Investors were also awaiting the outcome of the Fed's April meeting, where policymakers are expected to keep rates unchanged, while assessing the economic impact of the Iran war.
"Inflation is going to be under scrutiny with it having this impact and to what extent the Fed wants to look through that energy price increase," Pictet's Ramjee said.
The dollar index was 0.1 per cent higher at 98.723, while the euro was down 0.1 per cent at $1.1701. The dollar has acted as a safe-haven asset during the conflict, although it has fallen this month from its late-March peak.
U.S. Treasury yields were little changed, with the 10-year yield at 4.3576 per cent. Euro zone government bond yields were at their highest in weeks, as inflation worries persisted. The European Central Bank is expected to leave rates unchanged on Thursday.
Gold prices were down 0.6 per cent at $4,556.27 an ounce, having hit their lowest since April 2 in the previous session.
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