by Diana Mandia
Wall Street is expected to open scattered, while European stock markets rebound mid-session, with the exception of Paris, driven by the slight decline in oil prices and company results, as investors monitor the summit between China and the United States in Beijing against the backdrop of a diplomatic impasse in the Middle East. New York index futures indicate a 0.30% decrease for the Dow Jones, a 0.23% increase for the Standard & Poor’s 500, and a 0.72% increase for the Nasdaq. In Paris, the CAC 40 is down 0.38%, trading below the 8,000-point mark at 7,949.73 around 11:35 GMT. In Frankfurt, the DAX is up 0.84%, while the FTSE in London remains steady (+0.01%).
The EuroStoxx 50 index is up 0.39% and the FTSEurofirst 300 gains 0.35%. The Stoxx 600, which lost over 1% the previous day, is up by 0.32%.
US President Donald Trump is expected to meet with his Chinese counterpart, Xi Jinping, on Wednesday, with investors eager to see if Beijing’s influence on Tehran can help resolve the diplomatic impasse between the United States and Iran. Despite describing Iran’s response to his proposed agreement as “unacceptable” this week, the White House tenant mentioned not needing China’s help to end the war. Portfolio manager at Amundi, Amélie Derambure, warns that it is relatively unlikely for China to influence the ceasefire or peace process in Iran.
Oil prices are slightly down on Wednesday, offering a respite, even though the de facto closure of the Strait of Hormuz keeps prices above $100 per barrel, fueling inflation and slowing global growth. European company earnings are expected to report their highest increase in three years in the first quarter, driven by strong growth in the energy and finance sectors, but as the war drags on, concerns are rising.
In its latest monthly economic report published on Tuesday, the Bank of France (BdF) refrained from establishing a growth forecast for the second quarter, citing high uncertainty surrounding the impact of the war in the Middle East on economic activity. The second estimate of the Eurozone’s gross domestic product (GDP) for the January-March period confirmed a slowdown in growth in the first quarter of 2026.
The unemployment rate in the Eurozone’s second-largest economy rose to 8.1% in the first quarter, its highest level since the first quarter of 2021. Persistent inflation concerns, coupled with higher-than-expected consumer prices in the US in April, are adding to fears.
The US Producer Price Index (PPI), expected at 12:30 GMT, is anticipated to shed more light on the economic impact of the war.
KEY STOCKS TO WATCH ON WALL STREET:
EUROPEAN STOCKS:
A slew of corporate releases drives trading in Europe. In Paris, Alstom rises 2.8% after the TGV manufacturer posted a largely stable adjusted annual operating result. French steel tube manufacturer Vallourec jumps 8.67% after a 4% increase in first-quarter operating profit and investment group Eurazeo gains 1.19% following a 7% year-on-year increase in assets under management (AUM) at the end of March. Elsewhere in Europe, Zurich Insurance is up by 3.40% due to a rise in gross premiums in the first quarter for its damage insurance business, while Allianz advances by 1.33% on the back of a 52% quarterly net profit surge. Merck KGaA climbs over 8% after boosting its adjusted operating profit forecast for the year.
Adecco plunges by over 10%, with analysts pointing to lower-than-expected gross margin that offsets better-than-expected organic revenue growth. ABN Amro surges by 7.15%, as the Dutch bank reported a 12% year-on-year rise in quarterly profit, beating expectations. On the Stoxx 600, tech stocks advance by 2%, driven by the semiconductor industry. Infineon Technologies, STMicroelectronics, and Aixtron rise between 6% and 9%.
BONDS:
German government bond yields remain near multi-year highs, as investors anticipate rate hikes by the ECB by year-end to combat inflation. After gaining 5.5 basis points on Tuesday, the yield on the 10-year German Bund edges up by 0.7 basis points to 3.1050%, while the two-year bond yield remains stable at 2.7070%. Asset manager Jupiter believes that the market is expecting too many rate hikes from the ECB.
“The market is now anticipating up to three rate hikes, which seems exaggerated,” stated Ariel Bezalel, a fund manager, highlighting signs of slowing economic growth in Europe, such as unemployment figures in France. In the UK, bond yields are relatively stable on Wednesday, despite ongoing political uncertainty, with UK Prime Minister Keir Starmer fighting for his political survival.
In the US, bond yields are slightly down after a rise linked to inflation figures and geopolitical tensions the previous day. The yield on the 10-year Treasury falls by 0.6 basis points to 4.4669%. The two-year yield drops by almost a basis point to 3.9875%. American inflation data underscore the economic impact of the Iran war, increasing the likelihood of central banks being forced to raise rates sooner than expected.
The US Senate confirmed Kevin Warsh’s appointment as a Federal Reserve governor for a 14-year term on Tuesday and must now vote separately on his confirmation for a four-year term as Fed chair.
FOREX:
The dollar gains 0.18% against a basket of major currencies, hovering near a one-week peak following high US inflation figures and in a context of geopolitical uncertainty. The euro weakens by 0.2% to $1.1713.
The British pound drops by 0.23% amid political turmoil in the UK.
CRUDE OIL:
Oil prices remain steady on Wednesday, with investors awaiting further developments on the fragile ceasefire in the Middle East and Donald Trump’s visit to China. Brent crude gains 0.24% to $108.03 per barrel, while West Texas Intermediate (WTI) sheds 0.01% to $102.17. According to the International Energy Agency (IEA), global oil supply is expected to decrease by approximately 3.9 million barrels per day in 2026 due to disruptions caused by the war in Iran.
MAJOR ECONOMIC INDICATORS ON THE AGENDA FOR MAY 13:
COUNTRY GMT INDICATOR PERIOD CONSENSUS PREVIOUS
USA 12:30 Producer Price Index April +0.5% +0.5%
– year-on-year +4.9% +4.0%
(Some data may have a slight delay)
Reporting by Diana Mandia; Editing by Blandine Hénault
