European stocks mixed; investors digest earnings, ahead of key data, Fed meeting

Investing.com - European stock markets traded in a lackluster fashion Tuesday, with traders cautious ahead of the release of key European inflation and growth data, more corporate earnings and the start of the latest Federal Reserve policy-setting meeting.

At 03:25 ET (07:25 GMT), the DAX index in Germany traded 0.2% lower and the CAC 40 in France dropped 0.1%, while the FTSE 100 in the U.K. climbed 0.3%.

Eurozone inflation, growth data due

German retail sales rose more than expected in March, climbing 1.8% compared to the previous month, helping the tone Tuesday as this would bode well for the overall economy, the largest in the eurozone.

However, gains are hard to find as investors await the release of the latest inflation and growth data for the eurozone as a whole later in the session.

The European Central Bank has indicated that it is likely to cut its deposit rate in June, but there still exists a great degree of uncertainty over how many other cuts, if any, will be seen this year.

Preliminary eurozone consumer prices are expected to have risen 2.4% on the year in April, still marginally above the ECB’s 2.0% medium-term target, while the region is expected to have grown just 0.1% in the first quarter, growth of just 0.2% on an annual basis. 

Also weighing on volatility will be the start of the latest two-day policy meeting by the Federal Reserve. 

While the U.S. central bank is widely expected to keep rates unchanged at this meeting, investors will be looking for guidance about the probability of rate cuts later in the year given inflation continues to remain sticky.

European earnings season continues

The European earnings season has continued apace Tuesday, and numbers from online retail giant Amazon (NASDAQ:AMZN) will also be studied after the close of the U.S. session.

Volkswagen (ETR:VOWG_p) stock fell 2.2% after the German auto giant reported a drop in its operating profit of 20% in the first quarter as weaker demand for its premium brands drove a drop in sales.

Mercedes-Benz (OTC:MBGAF) stock fell 2.5% after the German luxury carmaker also posted a 30% annual drop in first-quarter earnings.

Stellantis (NYSE:STLA) stock fell 1.7% after the Franco-Italian car manufacturer said its revenue slumped 12% in the first quarter, supported to a degree by confidence its new models would support its growth and profitability in the second half of the year.

Carlsberg (CSE:CARLb) stock fell 1% after the Danish brewer’s CEO expressed caution over the trading environment even as it reported a small rise in quarterly sales, largely driven by 5% growth in China.

Air France KLM (OTC:AFLYY) stock fell 3.7% after the airline group reported a higher than expected first quarter operating loss as it faced high customer compensation at Dutch carrier KLM and one-off payments to staff.

Crude steadies with focus on Israel-Hamas peace talks

Oil prices steadied Tuesday, after the prior session's losses as focus remained on any progress in ceasefire talks between Israel and Hamas.

By 03:25 ET, the U.S. crude futures traded 0.1% higher at $82.70 a barrel, while the Brent contract rose 0.1% to $87.32 a barrel.

Both benchmarks lost around 1% on Monday after peace talks in Cairo between Israel and members of the militant group Hamas resulted in traders unwinding some of the geopolitical risk premium in oil prices.

Fears of disruptions in Middle East supply have been a key booster of oil prices in recent weeks. But this notion somewhat eased after a conflict between Iran and Israel did not give way to war. 

Additionally, gold futures fell 1.3% to $2,328.00/oz, while EUR/USD traded 0.1% lower at 1.0707.