By Diana Mandia
May 13 (Reuters) – Wall Street is expected to open mixed and European stock markets are rebounding on Wednesday midday, with the exception of Paris, driven by the slight decline in oil prices and company results. Investors are also keeping an eye on the summit between China and the United States being held in Beijing against the backdrop of a diplomatic standoff in the Middle East. Futures on New York indices indicate a 0.30% drop for the Dow Jones, a 0.23% rise for the S&P 500, and a 0.72% increase for the Nasdaq. In Paris, the CAC 40 is down 0.38% and trading below 8,000 points at 7,949.73 around 11:35 GMT. In Frankfurt, the DAX is up 0.84% and in London, the FTSE is 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 in China on Wednesday for a meeting with Chinese President Xi Jinping. Investors are eager to see if Beijing’s influence on Tehran can help break the diplomatic deadlock between the US and Iran. Trump, who this week described Iran’s response to his peace proposal as “unacceptable,” has stated that he does not believe China’s assistance is necessary to end the war.
“The most likely scenario envisaged by the markets is that China could influence the ceasefire or peace process in Iran, but this is deemed relatively unlikely,” cautioned Amélie Derambure, portfolio manager at Amundi.
Oil prices are slightly lower on Wednesday, providing some relief, although the de facto closure of the Strait of Hormuz is keeping prices above $100 per barrel, fueling inflation and slowing global growth.
European company profits are expected to record their strongest increase in three years in the first quarter, driven by robust growth in the energy and finance sectors. However, concerns are growing as the war continues.
In its latest monthly economic update released on Tuesday, the Bank of France refrained from establishing a growth forecast for the second quarter, citing high uncertainty surrounding the impact of the Middle East conflict on economic activity. Meanwhile, 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.
Inflationary concerns also persist, especially as operators learned on Tuesday that consumer prices in the US reached their highest level in three years in April, with energy-related inflation accounting for over 40% of this surge.
The US Producer Price Index (PPI), expected at 12:30 GMT, should provide further details on the impact of the war on economic activity.
STOCKS TO WATCH ON WALL STREET
EUROPEAN STOCKS
Numerous earnings reports are driving trading in Europe. In Paris, Alstom is up 2.8% after the TGV manufacturer reported a largely stable annual operating result.
French steel tubing manufacturer Vallourec is up 8.67% after a 4% increase in first-quarter operating profit, while investment group Eurazeo gained 1.19% after reporting a 7% rise in assets under management (AUM) at the end of March.
Elsewhere in Europe, Zurich Insurance is up 3.40% on higher gross premiums in the first quarter for its property insurance business, while Allianz is up 1.33% thanks to a 52% increase in quarterly net profit.
Merck KGaA is up over 8% after raising its adjusted operating profit forecast for the year.
Adecco is down over 10%, with analysts pointing to lower-than-expected gross margin offsetting better-than-expected organic revenue growth.
ABN Amro surges 7.15%, as the Dutch bank reported a 12% rise in quarterly profit year-on-year, exceeding expectations.
On the Stoxx 600, technology stocks are up 2%, buoyed by the semiconductor industry. Infineon Technologies, STMicroelectronics, and Aixtron are all up between 6% and 9%.
INTEREST RATES
German government bond yields remain near multi-year highs, as investors expect the European Central Bank (ECB) to raise rates by the end of the year to combat inflation.
After gaining 5.5 basis points on Tuesday, the yield on the 10-year German Bund is up 0.7 basis points to 3.1050%, while the two-year bond yield remains stable at 2.7070%.
Asset manager Jupiter, however, believes the market is anticipating too many rate hikes by the ECB.
“The market is now anticipating up to three rate hikes, which seems exaggerated,” said Ariel Bezalel, fund manager, pointing to signs of economic growth slowdown in Europe, such as the unemployment figures in France.
In the UK, yields are relatively steady on Wednesday, despite ongoing political turmoil as Prime Minister Keir Starmer fights for political survival.
In the US, yields are generally lower after a rise the previous day driven by inflation figures and geopolitical tensions. The 10-year Treasury yield is down 0.6 basis points to 4.4669%, while the two-year yield is down nearly one basis point to 3.9875%.
American inflation data has highlighted the economic impact of the war in Iran, with operators seeing it as a factor increasing the likelihood of central banks needing to raise rates earlier than expected.
The US Senate confirmed Kevin Warsh’s nomination as governor of the Federal Reserve for a 14-year term on Tuesday, and must now vote on his confirmation for a four-year term as Fed Chair in a separate vote scheduled for Wednesday.
EXCHANGE RATES
The dollar is up 0.18% against a basket of reference currencies, holding near its one-week peak following high US inflation figures and amidst geopolitical uncertainty.
The euro is down 0.2% at 1.1713 dollars.
The pound is down 0.23% against a backdrop of political crisis in the UK.
OIL
Oil prices are relatively stable on Wednesday, as investors await further developments on the delicate ceasefire in the Middle East and Donald Trump’s visit to China.
Brent crude is up 0.24% at $108.03 per barrel, while West Texas Intermediate (WTI) crude is down 0.01% at $102.17.
According to the International Energy Agency (IEA), global oil supply is expected to decrease by around 3.9 million barrels per day in 2026 due to disruptions caused by the war in Iran.
MAJOR ECONOMIC INDICATORS ON MAY 13:
COUNTRY GMT INDICATOR PERIOD CONSENSUS PRIOR
USA 12:30 Producer Price Index April +0.5% +0.5%
– year-on-year +4.9% +4.0%
(Some data may show slight delays)
(Reporting by Diana Mandia, editing by Blandine Hénault)
