Volkswacht Bodensee - Stocks turn lower ahead of key US inflation data

Stock indices pulled back at the start of trading in New York after having had set fresh records yet again on Friday following the Fed's resumption interest rate cuts.

"A consolidation trade is afoot after another sprint this month," said Briefing.com analyst Patrick O'Hare, as the S&P 500 index has gained 3.2 percent in September and the Nasdaq Composite 5.5 percent.

The stock market is "likely experiencing a profit-taking breather", he added.

Global equities have enjoyed a healthy run-up in recent months on optimism that the US central bank will lower borrowing costs several times before the end of 2025 over worries about a softening labour market.

On the heels of recent economic reports showing weaker US jobs growth, the Fed last week lowered borrowing costs by 25 basis points, its first reduction this year.

Investors will be listening for what Fed policymakers will have to say during public appearances this week.

They will also be waiting for the release on Friday of the personal consumption expenditures (PCE) price index, which is the Fed's preferred measure of inflation.

"The big market moving announcement is likely to be the US PCE inflation report," said AJ Bell investment director Russ Mould.

The dollar fell against major rivals as the US interest rate cut weighed on the greenback, while the price of gold hit a fresh high.

Crude oil prices fell around one percent as traders focused on concerns production will outstrip demand.

In Europe, Frankfurt and Paris stock indices dropped in early afternoon deals, while London edged out a gain.

- 'US-China detente' -

As the new trading week kicked off, investors took some heart from talks between US President Donald Trump and Chinese leader Xi Jinping on Friday.

Trump said progress was made "on many very important issues", including a deal to sell blockbuster social media app TikTok.

He added that the pair would meet on the sidelines of an Asia-Pacific Economic Cooperation summit in South Korea at the end of next month and that he would travel to China next year.

"While lacking apparent substance... (the meeting) does look to have helped create a positive atmosphere to enable extension of the ongoing US-China detente," said National Australia Bank's Ray Attrill.

Mumbai edged down as India's $283-billion tech sector took a hit after Trump on Friday ordered an annual $100,000 fee be added to new H-1B skilled worker visas, creating potentially major repercussions for the tech industry where such permits are prolific.

Shares in Porsche and VW fell more than eight percent following news that Porsche will dramatically slow its shift to electric vehicles amid weak demand, prompting parent company Volkswagen to warn of a multibillion-euro hit.

- Key figures at around 1330 GMT -

New York - Dow: DOWN 0.4 percent at 46,146.84 points

New York - S&P 500: DOWN 0.2 percent at 6,650.87

New York - Nasdaq Composite: DOWN 0.1 percent at 22,602.57

London - FTSE 100: UP less than 0.1 percent at 9,221.66

Paris - CAC 40: DOWN 0.4 percent at 7,824.43

Frankfurt - DAX: DOWN 0.7 percent at 23,475.10

Tokyo - Nikkei 225: UP 1.0 percent at 45,493.66 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 26,344.14 (close)

Shanghai - Composite: UP 0.2 percent at 3,828.58 (close)

Euro/dollar: UP at $1.1783 from $1.1745 on Friday

Pound/dollar: UP at $1.3508 from $1.3472

Dollar/yen: DOWN at 147.76 yen from 147.90 yen

Euro/pound: UP at 87.24 pence from 87.18 pence

West Texas Intermediate: DOWN 1.1 percent at $61.69 per barrel

Brent North Sea Crude: DOWN 1.0 percent at $66.03 per barrel

burs-rl/lth

T.Zimmermann--VB