Investing.com - European stock markets rose Wednesday, as investors digested comments from U.S. Federal Reserve Chair Jerome Powell amid a volatile political situation.
At 03:15 ET (07:15 GMT), the DAX index in Germany traded 0.6% higher, the CAC 40 in France rose 0.6% and the FTSE 100 in the U.K. climbed 0.5%.
Powell flags progress on inflation
Sentiment in Europe received a boost Wednesday after Fed head Powell flagged progress towards bringing down inflation, raising hopes the U.S. central bank could start cutting interest rates in the near future.
The Fed has made "significant progress" in bringing the pace of price gains back down to 2%, Powell said at an European Central Bank event in Portugal on Tuesday, noting that the labor market -- a major driver of inflation -- is showing signs of "cooling off," with wage increases easing back towards "more sustainable levels."
The ECB's Christine Lagarde and Philip Lane are set to speak at the same event later Wednesday, but the eurozone’s central bank is likely to delay lowering borrowing costs further after cutting rates last month, with data on Tuesday showing the crucial services component in eurozone inflation staying stubbornly high.
Services PMI data for June in the eurozone are due later in the session, and are expected to remain in expansionary territory.
Politics looms large in France, UK
Investors are also looking at all things politics, with both France and the U.K. set to hold parliamentary elections in the coming days.
Sunday sees the crucial legislative run-off vote in France. The far-right National Rally won the popular vote last weekend, but it remains unclear whether it will govern France given the potential for political dealmaking by its rivals over the coming days.
The U.K. goes to the polls on Thursday, amid expectations of a landslide win for the opposition Labour Party running high.
Such a result could see a return to stability after heavy political turbulence during the Conservatives' 14-year rule, and could also result in the rebuilding of trade links with Europe.
GSK buys vaccine candidates rights
GSK (LON:GSK) stock fell slightly Wednesday after the U.K. drugmaker bought from CureVac the full rights to develop and manufacture vaccine candidates for influenza and COVID-19 that use messenger RNA technology for slightly more than $1 billion).
Vodafone (NASDAQ:VOD) stock edged higher after the telecommunications company and Virgin Media O2 reached a new network sharing agreement in the U.K., including a plan to shift spectrum which could help Vodafone win regulatory approval for its tie-up with mobile operator Three.
Crude rises on US stockpile draw
Crude prices rose Wednesday, boosted by industry data showing a bigger-than-expected draw in U.S. crude inventories.
By 03:15 ET, the U.S. crude futures (WTI) traded 0.5% higher at $83.20 per barrel, while the Brent contract climbed 0.5% to $86.67 per barrel.
Both benchmarks had fallen back from their highest levels since the end of April during the previous session on fading concerns that Hurricane Beryl would disrupt production in the Gulf of Mexico.
The industry body American Petroleum Institute released data on Tuesday showing that U.S. crude oil inventories fell by just over 9 million barrels in the week ended June 28, much more than expected.
The Energy Information Administration is due to release the official weekly data later in the session.
Gasoline demand in the U.S., the world's biggest oil consumer, is expected to ramp up with the Independence Day holiday this week.