Jornal Do Brasilia - Stock markets climb as data shows US inflation slows

The week's main focus is expected to be US consumer inflation figures out on Wednesday, which could influence the Federal Reserve's monetary policy decision-making.

However, investors got reassuring wholesale price data on Tuesday, sending Wall Street stocks higher.

The producer price index (PPI) rose by 0.1 percent in July, down slightly from a 0.2 rise in June, the US Labor Department said in a statement.

This was slightly cooler than the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.

Core PPI that excludes volatile food and energy prices was flat.

On an annual basis, PPI came in at 2.2 percent, down sharply from a revised 2.7 percent rise a month earlier.

"The key takeaway from the report is the disinflation trend in total and core PPI, as that is moving in a necessary direction to drive a rate cut by the Fed," said Briefing.com analyst Patrick O'Hare.

While the mood on trading floors has calmed since last week's volatility, observers warned that the inflation readings could cause big market moves in either direction.

A weaker-than-expected print adding to worries about the world's biggest economy, while a strong reading could dent rate-cut bets.

"One of the major risks is the timing and magnitude of the Fed's rate cuts," said ACY Securities' Luca Santos.

"If the Fed delays easing monetary policy, the US economy could risk entering a deeper slowdown, leading to a potential recession.

"Conversely, if the Fed cuts rates too aggressively, it might reignite inflationary pressures or create financial market instability. Balancing these risks will be crucial for maintaining economic stability," Santos added.

The Fed is widely expected to make a first interest rate cut in September, and markets expect it to make at least a second one this year.

Tokyo surged in Asian trading, with traders catching up with Monday's gains elsewhere after a long holiday weekend in Japan.

London ended the day higher after data showed Britain's unemployment rate had unexpectedly dropped in the second quarter and wage growth slowed to the lowest level in nearly two years.

Frankfurt also rose despite data showing German investor confidence worsened more than expected in August, as a hoped-for recovery in Europe's largest but struggling economy remains out of reach.

The ZEW institute's closely-watched economic expectations index fell to 19.2 points, a steep drop of 22.6 points from a month earlier.

Shares in Starbucks jumped more than 20 percent after the coffee shop chain announced that Chipotle chief executive Brian Niccol would take over as chairman and CEO next month.

The leadership shifts come as Starbucks pushes to turn around its business, while contending with broad-based sales declines in its most recent financial results.

Chipotle shares slumped more than 10 percent.

Crude futures dropped but remained well up over the week owing also to an escalation of tensions in the Middle East.

The White House warned that a "significant set of attacks" by Iran and its proxies against Israel was possible as soon as this week after top leaders of Hezbollah and Hamas were assassinated in late July.

- Key figures around 1530 GMT -

New York - Dow: UP 0.5 percent at 39,556.65 points

New York - S&P 500: UP 1.1 percent at 5,402.41

New York - Nasdaq Composite: UP 1.8 percent at 17,076.02

London - FTSE 100: UP 0.3 percent at 8,235.23 (close)

Paris - CAC 40: UP 0.4 percent at 7,275.87 (close)

Frankfurt - DAX: UP 0.5 percent at 17,812.05 (close)

EURO STOXX 50: UP 0.5 percent at 4,694.92 (close)

Tokyo - Nikkei 225: UP 3.5 percent at 36,232.51 (close)

Hong Kong - Hang Seng Index: UP 0.4 percent at 17,174.06 (close)

Shanghai - Composite: UP 0.3 percent at 2,867.95 (close)

Euro/dollar: UP at $1.0952 from $1.0931 on Monday

Pound/dollar: UP at $1.2826 from $1.2766

Dollar/yen: DOWN at 146.97 yen from 147.26 yen

Euro/pound: DOWN at 85.39 pence from 85.61 pence

West Texas Intermediate: DOWN 1.8 percent at $78.65 per barrel

Brent North Sea Crude: DOWN 1.7 percent at $80.94 per barrel

burs-rl/giv

V.J. Coelho--JDB