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Wall Street jumps as data shows inflation is cooling but FTSE closes in the red

 FTSE 100 Traders work on the floor at the New York Stock Exchange in New York, Thursday, Nov. 10, 2022. (AP Photo/Seth Wenig)
Wall Street jumped on signs inflation may have peaked but the FTSE 100 struggled the entire session. Photo: Seth Wenig/Reuters

The FTSE 100 and European stocks had mixed trading day on Tuesday, with the UK’s benchmark in negative territory following news that the UK unemployment rate was higher than expected.

On Wall Street, stocks were higher on hopes that inflation may have peaked.

The Dow Jones (^DJI) was up 0.71% to 33,773 points, the S&P 500 (^GSPC) climbed 1.3% to 4,008 points and the tech-heavy Nasdaq (^IXIC) advanced 2.15% to 11,436.

The produce price index, a measure of wholesale inflation, rose 0.2% for the month of October, versus the consensus estimate for a 0.4% increase. Investors are seeing this as a sign of inflationary pressure abating last month, sparking a sharp rally.

The FTSE 100 (^FTSE) struggled for direction the entire session and closed in the red, losing 0.38% to close at 7,357, while the CAC (^FCHI) in Paris advanced 0.33% to 6,630 points. In Germany, the DAX (^GDAXI) gained 0.37% to 14,366.

Vodafone (VOD.L) tumbled 7.96% after the mobile operator lowered its full year earnings forecast and announced plans for a further €1bn of cost savings by 2026.

Read more: Paris overtakes London to become Europe’s biggest stock market

The telecommunications giant warned that the global macroeconomic climate has worsened in the face of rising energy costs and broader inflation. It has lowered its core earnings guidance, and its predictions for free cash flow.

Sterling (GBPUSD=X) gained 1.14% against the dollar on Tuesday morning making a pound worth a little over $1.18. The currency is also trading strongly against the euro, up 0.17%, making a euro worth 88p.

Meanwhile, Brent crude (BZ=F) has retreated to $92/barrel.

Read more: UK economy at ‘significant’ risk of recession in 2023, says think tank

In Asia, Tokyo’s Nikkei 225 (^N225) climbed 0.10% to finish at 27,990 while the Hang Seng (^HSI) in Hong Kong climbed 3.78% to 18,285. The Shanghai Composite (000001.SS) also made gains, advancing 1.64% to 3,134 points.

Watch: What is a recession and how do we spot one?