European Markets Hold Steady Ahead of US Inflation Data

European markets are holding steady ahead of the US July Consumer Price Index report, due out at 8:30 a.m. ET. The STOXX Europe 600 index is near all-time highs, having gained nearly 12% for the year. Investors are waiting to see if the CPI reading comes in at or below the expected 3.4%, which would reinforce the case for the Federal Reserve to hold rates steady or even signal cuts.

The US-Iran conflict has become a semi-permanent fixture in market calculations, with six months of tensions repricing European risk. Attacks on shipping routes have pushed Brent crude up 0.6% to $89.45 per barrel, keeping the energy cost conversation front and center for European markets that import most of their fuel.

Aerospace, defence, and energy stocks have gained as investors rotated toward obvious beneficiaries of a prolonged conflict environment. Meanwhile, luxury goods stocks dropped 2%, and healthcare fell 1.3%.