Volkswacht Bodensee - US, European markets rise as investors weigh rates, earnings

Expectations of another bumper rate cut by the Federal Reserve were dampened by data Thursday showing US consumer inflation slowed to 2.4 percent in September, which was slightly above analyst expectations.

"Somewhat higher-than-expected inflation in September has eliminated market expectations of anything more than a 25 basis point interest rate reduction at the Fed's November meeting," said market strategist Patrick Munnelly at traders Tickmill Group.

Fresh data on Friday showed US wholesale prices were unchanged in September.

Insurance company Nationwide said the latest inflation report "won't spoil the Fed's plans" to further reduce interest rates in 2024.

The central bank's next policy meeting is in November.

Shares in JPMorgan Chase jumped more than five percent after the bank reported lower profits but topped estimates, with executives saying the economy was poised to avoid a recession.

Tesla shares fell almost eight percent as investors were apparently disappointed by Elon Musk's presentation of a much-hyped electric Robotaxi without steering wheels or pedals.

Critics said the presentation was short on details of financial steps and timelines to make the product a reality.

Wall Street's three main indexes were up in midday deals, with the tech-heavy Nasdaq reversing morning losses.

The Paris and Frankfurt stock markets closed higher as the European Central Bank is expected to make its third interest rate cut of the year next week.

Fawad Razaqzada, market analyst at City Index and Forex.com, said the ECB is expected to reduce rates by 25 basis points, half the size of the Fed's first rate cut in four years last month.

"Holding the ECB from being more aggressive in its rate-cutting is the still-strong wage growth in Eurozone, and the fact that the Fed has signalled it won't cut rates aggressively again following its initial 50 basis point rate cut," Razaqzada said.

"Middle East tensions add another layer of uncertainty for Eurozone given that its largest member states are all net energy importers," he said.

In London, the British capital's top-tier FTSE 100 index rose as data showed the UK economy rebounded in August after stagnating for two months, giving a boost to the new Labour government weeks before it presents its maiden budget.

In Asia, the Shanghai stock market closed more than two percent lower after a week dominated by concerns over a lack of detail on the scale of China's recent batch of stimulus measures.

Focus is now on a briefing Saturday at which Finance Minister Lan Fo'an is to set out fiscal policy.

"The stakes are high -- most observers agree that recent stimulus announcements won't amount to much unless backed up by fiscal support," said Julian Evans-Pritchard, head of China economics at Capital Economics, in a note.

"Three factors will be key in determining the impact of stimulus: its scale, where it's channelled, and how soon it's deployed," he said.

Elsewhere, oil steadied after having surged more than three percent Thursday following the Israeli defence minister's vow that his country would strike Iran in retaliation for last week's missile attack.

- Key figures around 1600 GMT -

New York - Dow: UP 0.8 percent at 42,796.92 points

New York - S&P 500: UP 0.6 percent at 5,814.33

New York - Nasdaq: UP 0.3 percent at 18,344.57

London - FTSE 100: UP 0.2 percent at 8,253.65 (close)

Paris - CAC 40: UP 0.5 percent at 7,577.89 (close)

Frankfurt - DAX: UP 0.9 percent at 19,373.83 (close)

Tokyo - Nikkei 225: UP 0.6 percent at 39,605.80 (close)

Shanghai - Composite: DOWN 2.6 percent at 3,217.74 (close)

Hong Kong - Hang Seng Index: Closed for holiday

Euro/dollar: UP at $1.0943 from $1.0935 on Thursday

Pound/dollar: UP at $1.3069 from $1.3058

Dollar/yen: UP at 149.11 yen from 148.58 yen

Euro/pound: DOWN at 83.72 pence from 83.73 pence

West Texas Intermediate: DOWN 0.7 percent at $75.33 per barrel

Brent North Sea Crude: DOWN 0.6 percent at $78.94 per barrel

H.Weber--VB