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European markets open to close; investors react to US inflation data

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European markets closed lower on Wednesday as investors reacted to the latest inflation data from the United States

The pan-European Stoxx 600 tentatively ended down 0.8%, with almost all sectors and all major exchanges slipping into negative territory. Mining stocks led the losses, down 2.3%, while oil and gas stocks bucked the downward trend, up 0.8%.

U.S. stocks posted their worst day in two years on Tuesday after a key August inflation report came out hotter than expected, hurting investor optimism for cooling prices and a less aggressive Federal Reserve.

U.S. consumer price index (CPI) inflation rose 0.1% for the month and 8.3% a year in August, the Bureau of Labor Statistics reported Tuesday, challenging economists’ expectations that headline inflation would fall 0.1% month-on-month.

Core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.

The reading fueled fresh speculation that the US Federal Reserve will continue its aggressive monetary policy tightening.

The inflation report was one of the last inflation data the Fed will see ahead of its September meeting, where the central bank is expected to make its third straight 0.75 percentage point hike in a bid to fight back. against high inflation.