Wall Street mixed after inflation data as European bourses dip ahead of ECB

Wall Street stock indices moved in opposite directions Wednesday after a mixed inflation report as European bourses dipped ahead of a European Central Bank decision.

US consumer inflation accelerated to 3.7 percent in August, up from 3.2 percent in July, an increase fueled by higher gasoline prices.

US stocks wobbled in morning trading as investors mulled over the data and its implications for the Federal Reserve, which meets next week on interest rates.

But by the end of the session, both the S&P 500 and Nasdaq were narrowly higher while the Dow edged lower.

"While US prices have risen at a faster pace over the last month, stocks have nonetheless taken comfort from the drop in annual core inflation," said Chris Beauchamp, chief market analyst at online trading platform IG.

"Overall, there is nothing here to change the Fed's plans to hold interest rates unchanged at next week's... meeting," said Andrew Hunter, deputy chief US economist at Capital Economics, which expects core inflation to fall as the US economy slows.

Ben Laidler, global markets strategist at financial services firm eToro, said the CPI reading will force the Fed "to keep interest rates at a 20-year high until it sees more progress in the last and hardest yards to get inflation firmly on track towards its 2 percent target."

The US central bank has insisted that its decision-making on monetary policy will be data-driven as it assesses next steps.

A recent run of strong data, particularly on the jobs market and the services sector, has revived talk that more rate hikes could be on the way, with a surge in oil prices to 10-month highs adding to those concerns.

Both Paris and Frankfurt stocks closed lower ahead of an interest-rate decision Thursday from the ECB.

The central bank is walking a tightrope between still-high inflation and a darkening eurozone outlook as it decides whether to lift interest rates again or finally pause its historic hiking cycle.

On the corporate front, shares in British oil giant BP fell 2.8 percent after chief executive Bernard Looney unexpectedly resigned, having admitted to not being "fully transparent" about historical relationships with colleagues.

Looney, 53, has left after less than four years in the role, having seen the firm through a tumultuous period that included huge swings in prices owing to the Covid pandemic and Russia's invasion of Ukraine.

He had also come under fierce criticism from environmentalists, who have accused BP and rivals of not going far enough in transitioning away from fossil fuels.

Netflix shares sank 5.2 percent as the company's chief financial officer told an investor conference the streaming company's ad-based business was growing slowly.

New York - Dow: DOWN 0.2 percent at 34,575.53 (close)

New York - S&P 500: UP 0.1 percent at 4,467.44 (close)

New York - Nasdaq: UP 0.3 percent at 13,813.59 (close)

London - FTSE 100: FLAT at 7,525.99 (close)

Frankfurt - DAX: DOWN 0.4 percent at 15,654.03 (close)

Paris - CAC 40: DOWN 0.4 percent at 7,222.57 (close)

EURO STOXX 50: DOWN 0.4 percent at 4,223.48 (close)

Tokyo - Nikkei 225: DOWN 0.2 percent at 32,706.52 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 18,009.22 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,123.07 (close)

Euro/dollar: DOWN at $1.0733 from $1.0754 on Tuesday

Pound/dollar: FLAT at $1.2490

Dollar/yen: UP at 147.47 yen from 147.08 yen

Brent North Sea crude: DOWN 0.2 percent at $91.88 per barrel

West Texas Intermediate: DOWN 0.4 percent at $88.52 per barrel