European stock markets were lower Wednesday morning as jitters remained over the U.S. debt ceiling bill ahead of the June 5 deadline.
The Stoxx 600 index was down 0.5% at 8:45 a.m. London time, with food and beverage stocks down 1.1% and autos 1.05% lower. Utilities and telecoms benefited from a move toward defensives as the only sectors in the green, both up around 0.1%.
After passing a key procedural vote in the House Rules Committee on Tuesday, the Fiscal Responsibility Act is provisionally scheduled to face a floor vote in the Republican-majority House around 8:30 p.m. ET Wednesday.
It then needs to pass the Democratic-controlled Senate before Monday, when the U.S. Treasury predicts it will not have enough money to meet its debt obligations.
The nonpartisan Congressional Budget Office on Tuesday estimated the bill would see budget deficits “reduced by about $1.5 trillion” over the next decade, in line with party projections — potentially providing it with additional support.
European stocks dipped 0.9% on Tuesday, with a sharp fall in Nestle
shares taking food and beverages down 2.7% as utilities lead gains. Tech stocks continued to see a boost from U.S.-listed Nvidia, which briefly hit a $1 trillion market cap Tuesday following its better than expected results.
Flash figures Wednesday morning showed inflation in France cooled to 6% in May, down from 6.9% in April. Prices were 0.1% lower month-on-month in the index comparing inflation across the EU. The figures were lower than forecast in a Reuters poll of economists.
Investors are also assessing data out of China, where the manufacturing purchasing managers’ index declined for a second straight month and at a faster rate than expected; and property pricing and transactions “weakened sharply.”
Hong Kong’s Hang Seng index dropped 2% to a 2023 low, and mainland Chinese and Japanese markets were lower.
U.S. stock futures were lower early Wednesday.
