Stocks cautious before tariff updates, US inflation data

AFP | London

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Equity markets moved little in cautious European and US trading Monday as investors await key US inflation data this week that could offer guidance on rate cuts long sought by President Donald Trump.

Reports that chip giants Nvidia and AMD would give Washington a 15-percent cut of the revenue from AI sales to China also bolstered expectations of a new pause on Washington's tariffs against China.

"The market seems very relaxed ahead of tomorrow's deadline on US-China trade talks, reflecting the assumption an extension is in the offing and a deal will eventually be reached," said AJ Bell investment director Russ Mould.

Also in view is a high-stakes summit between Trump and Russian President Vladimir Putin on Friday in Alaska, which could pave the way for a Ukraine ceasefire and ease tough Western sanctions against Moscow.

London's FTSE 100 index edged higher but Paris and Frankfurt closed lower, pulled down in particular by defence stocks as investors calculated the chances of an end to the Ukraine war.The key Wall Street indices came under moderate pressure after the Nasdaq climbed to another record high on Friday, bolstered by solid earnings from tech giants in particular.

"Markets are bracing for a surprisingly busy week, with several key events and data releases likely to shape sentiment," notably US inflation, said Jim Reid, managing director at Deutsche Bank. The US consumer price index on Tuesday could provide grist for Trump's campaign against Federal Reserve chief Jerome Powell. Powell has been in the president's crosshairs over his refusal to cut interest rates while awaiting the impact of Trump's tariffs blitz on the economy.