European stocks and U.S. equity futures are under pressure as inflation worries persist

Dow futures YM00, -0.42% fell more than 200 points, with S&P 500 futures ES00, -0.58% down 0.8% and Nasdaq-100 futures NQ00, -1.03% off 1.2%. Major U.S. stock indexes finished lower on Tuesday, as enthusiasm over a strong batch of earnings from major retailers competed with concerns over lofty valuations and signs of some inflationary pressures. Weaker-than-expected housing data didn’t help.

Global yields were also under pressure, with that of the 10-year German bund TMBMKDE-10Y, -0.086% up 1 basis point to -0.08%. The yield on the 0-year Treasury bond TMUBMUSD10Y, 1.663% rose 2 basis points to 1.6599%.

“The inflation fears, the virus fears, the fears of seeing a slower-than-thought or a delayed recovery due to the new restriction measures on the Indian variant of the coronavirus are all disquieting for the average investor,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.

The minutes of the Federal Open Market Committee meeting of April 27-28 will be released later on Wednesday, with investors watching out for any indications on whether the central bank is considering a shift in its accommodative monetary stance.

Adding to worries over global inflation, U.K. data showed consumer prices rose 1.5% on the year in April, twice the rate of inflation reported in March, according to the Office for National Statistics.

Oil prices were also under pressure, with crude CL00, -1.57% and Brent futures BRN00, -1.46% dropping 1% each. Those losses came after data from the American Petroleum Institute reportedly showed an unexpected rise in U.S. crude supplies — 620,000 barrels for the week ended May 14. Report of potential progress on Iran nuclear talks saw oil prices close lower on Wednesday.

Crude oil weakness dragged down shares of heavily weighted energy companies, with Royal Dutch Shell RDSA, -1.28% RDS.A, -1.76%, BP BP, -0.81% BP, -1.31% and Total FP, -1.66% TOT, -1.38% each down 1% or more.

Technology names were under pressure, with heavily weighted semiconductor equipment provider ASML Holding ASML, -0.50% ASML, -3.08% dropping over 2%. Shares of German business software group SAP SAP, +0.47% SAP, -1.20% fell 1.4%.

Shares of John Laing  JLG, +11.19% surged 11%, after New York private-equity firm KKR & Co. KKR, -0.81% said it has agreed to buy the U.K.-listed infrastructure investor and manager for £2 billion ($2.84 billion) in cash.

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