Investing.com - European stock markets traded higher Tuesday with the tech sector leading the way, as investors await the U.S. Federal Reserve’s annual Jackson Hole gathering later in the week.
At 03:55 ET (07:55 GMT), the DAX index in Germany traded 0.9% higher, the CAC 40 in France climbed 1% and the FTSE 100 in the U.K. rose 0.3%.
Tech sector leads the way
The European tech sector has received a boost from gains on Wall Street overnight, with the Nasdaq Composite closed over 200 points, or 1.6%, higher, its best day in almost four weeks on the back of hefty gains from Nvidia (NASDAQ:NVDA), as investors sought exposure to the world’s most valuable chipmaker ahead of its results later this week.
Shares of Amsterdam-listed chipmakers ASML Holding (AS:ASML), ASM International (AS:ASMI) and BE Semiconductor Industries (AS:BESI) gained between 1.4% and 2.0%.
Elsewhere, Ubisoft Entertainment (EPA:UBIP) stock advanced 6.3% after Microsoft (NASDAQ:MSFT) said that its acquisition target Activision Blizzard (NASDAQ:ATVI) would sell its non-European streaming rights to the French video game producer.
BHP Group (LON:BHPB) stock fell 0.2% after the world’s biggest miner, reported a drop in profit of 37% from a year earlier as surging costs and a tight labor market in Australia hit earnings.
That said, while cutting its forecast for China's growth to 5%-5.5% from 5.75%-6.25%, BHP still expects China to produce more than a billion metric tons of steel this year for the fifth year running, a relatively bright spot in global markets
Jackson Hole get-together eyed
However, gains are unlikely to be sustained as investors remain concerned over slowing growth in China, especially after a smaller-than-expected interest rate cut by the People’s Bank on Monday, a struggling eurozone economy, and the possibility of rising U.S. interest rates.
The Fed’s Jackson Hole symposium at the end of the week is likely to keep trading within tight trading ranges this week, as investors warily await guidance of where the U.S. central bank goes next with its monetary policy.
Chair Jerome Powell's speech on Friday comes amid expectations the Fed will pause on another interest rate increase when it next meets on policy in September, but uncertainty over what happens next is rife.
European Central Bank President Christine Lagarde is also scheduled to speak on Friday, and her comments will be carefully parsed for clues on the central bank’s next move in September.
Inflation has started to retreat in the eurozone but remains well above the central bank’s 2% target, while the region’s economy has broadly stagnated for the past three quarters as manufacturing is deep in recession, suggesting barely positive GDP growth in 2023.
Crude edges lower; U.S. inventories due later
Oil prices edged lower Tuesday, as traders warily weighed the prospect of a faltering Chinese economic recovery, while also awaiting more signals on U.S. monetary policy at the Jackson Hole symposium at the end of the week.
U.S. crude oil and gasoline inventories are also due later in the session from the American Petroleum Institute industry group, while the Energy Information Administration, the statistical arm of the U.S. Department of Energy, will release its own data on Wednesday.
By 03:55 ET, U.S. crude futures traded 0.5% lower at $79.62 a barrel, while the Brent contract dropped 0.5% to $84.02.
Additionally, gold futures rose 0.4% to $1,930.65/oz, while EUR/USD traded 0.3% higher at 1.0927.