Volkswacht Bodensee - Stocks consolidate as US inflation worries undermine Fed rate hopes

Market optimists now expect the Federal Reserve to cut rates not just this month, but also on several more occasions throughout next year.

Such expectations are, however, contingent on tame inflation in the US.

On that front, Friday's personal consumption expenditures (PCE) index -- the Fed's preferred gauge of inflation -- was less than reassuring, analysts said.

The PCE reading, which came in line with forecasts, "should cement a rate cut at next week's Fed meeting", said Bret Kenwell, US Investment Analyst at etoro, a trading firm.

But, he cautioned, "it continues to point toward a sticky inflation situation".

Optimism on a series of 2026 rate cuts has been mostly based on reports reinforcing the view that the US jobs market is softening.

- Netflix takeover -

Netflix's takeover of Warner Bros. Discovery, announced before Wall Street's opening, caught investor attention in New York business.

The deal represents the biggest consolidation in the entertainment sector this decade but could, according to analysts, run into regulatory problems because of its size.

Netflix shares were around three percent lower in late-morning New York trading, while Warner Bros. Discovery shares rose by almost the same percentage.

Earlier Friday in Asia, Mumbai equities won a boost from a rate cut by the Indian central bank.

The rupee, which this week hit a record low against the dollar, rose.

On the corporate front in Asia, shares in Chinese group Moore Threads Technology, which makes chips for the artificial intelligence sector, soared more than 500 percent on its market debut in Shanghai after the company raised $1.1 billion in an initial public offering.

"This IPO has become a barometer for faith in China's next-gen AI‑chip ambitions," said Dilin Wu, research strategist at Pepperstone.

In Europe, shares in Swiss Re were down more than six percent at the close after the reinsurance giant's profit target for 2026 and plans for share buybacks disappointed financial analysts.

- Key figures at around 1655 GMT -

New York - Dow: UP 0.2 percent at 47,942.10 points

London - FTSE 100: DOWN 0.5 percent at 9,667.01 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,114.74 (close)

Frankfurt - DAX: UP 0.6 percent at 24,028.14 (close)

Tokyo - Nikkei 225: DOWN 1.1 percent at 50,491.87 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 26,085.08 (close)

Shanghai - Composite: UP 0.7 percent at 3,902.81 (close)

Euro/dollar: DOWN at $1.1634 from $1.1648 on Thursday

Pound/dollar: DOWN at $1.3325 from $1.3335

Dollar/yen: UP at 155.29 yen from 155.03 yen

Euro/pound: UP at 87.33 pence from 87.00 pence

Brent North Sea Crude: UP 0.6 percent at $63.61 per barrel

West Texas Intermediate: UP 0.5 percent at $59.95

burs-jh/jj

L.Meier--VB