European Stocks Slump on Rising Oil Prices Amid US Inflation Relief

European stocks closed slightly lower on Wednesday as investors weighed the impact of cooling US inflation against rising oil prices.

The pan-European Stoxx Europe 600 fell 0.2%, while Germany's DAX dropped 0.2% and France's CAC 40 weakened by 0.5%

However, despite the losses, the Stoxx 600 remained close to record highs as investors continued to look for signs that the global economic outlook is improving.

The main boost came from the latest US inflation report, which showed consumer prices rose 0.1% in July from the previous month and cooled to an annual rate of 3.4%

This was exactly in line with expectations, and core CPI, which excludes food and energy prices, increased 0.2% during the month and stood at 2.5% annually.

UBS strategists said STOXX 600 companies were tracking a 22% year-over-year increase in second-quarter profits, and corporate earnings remain an important source of support for European markets.