European shares closed lower, failing to track the broadly positive tone in U.S. equities. The declines came despite softer-than-expected U.S. PPI data, which showed headline producer prices unchanged in July versus a forecast 0.2% increase, while the year-on-year rate slowed to 4.7% from 5.5%. The report reinforced the disinflationary signal from the prior day's below-forecast CPI release, bolstering market expectations that the Federal Reserve will begin cutting rates at its September meeting.

European Indices

All major European indices ended the session in the red:

• German DAX: 26,292.01, -0.15%
• France CAC 40: 8,650.57, -0.28%
• UK FTSE 100: 10,772.68, -0.56%
• Spain's Ibex: 20,168.60, -0.18%
• Italy's FTSE MIB: 53,668.60, -0.18%

The FTSE 100 was the weakest performer among the major indices, with losses in mining shares contributing to the decline. The divergence from the U.S. rally partly reflects the European Central Bank having already delivered a rate cut in June, meaning some of the policy-easing benefit may already be reflected in European valuations, whereas U.S. markets are still pricing in the prospect of fresh Fed cuts ahead.

European Bond Markets

In the European debt market, benchmark 10-year yields fell across the board, supported partly by the drop in oil prices:

• Germany: 3.134%, -3.4 basis points
• France: 3.947%, -4.1 basis points
• UK: 4.957%, -2.0 basis points
• Spain: 3.568%, -3.9 basis points
• Italy: 3.899%, -4.6 basis points

The synchronized decline in European yields alongside U.S. Treasuries underscored a global shift in rate-cut expectations, with both the Fed and ECB seen on easing paths.

Crude Oil

Crude oil remained lower on the day, though it recovered sharply from its session low. WTI fell to $80.09, breaking below its 100-hour moving average at $81.45, but sellers were unable to sustain the downside momentum. The price subsequently snapped back and was trading around $82.56, down $0.65 on the day. Oil has been under pressure as demand concerns — particularly related to economic softness in China, the world's largest crude importer — offset ongoing geopolitical supply risks.

U.S. Equities

As London and European traders headed out for the session, U.S. stocks were mixed but tilted to the upside, with the Dow the lone major index trading lower:

• Dow Industrial Average: 53,674.36, -0.19%
• S&P 500: 7,777.26, +0.37%
• Nasdaq Composite: 26,712.35, +0.47%
• Russell 2000: 3,048.22, +0.09%
• Nasdaq 100: 30,003.72, +0.88%

The Nasdaq 100 led the gains and pushed above the 30,000 level, while the S&P 500 was also solidly higher following the softer PPI report, putting it on pace for a record close. Growth- and tech-heavy indices have been particularly sensitive to falling yields, which reduce the discount rate applied to future earnings.

U.S. Treasury Yields

U.S. Treasury yields moved lower across the curve:

• 2-year: 4.147%, -5.2 basis points
• 5-year: 4.320%, -5.5 basis points
• 10-year: 4.643%, -4.9 basis points
• 30-year: 5.212%, -3.6 basis points

Overall, European traders left behind a session defined by lower European equities, falling global yields, and weaker oil. Meanwhile, U.S. equities took a more positive view of the softer inflation data, particularly in the S&P 500 and Nasdaq. Attention now turns to the Federal Reserve's Jackson Hole symposium later this month, where Chair Jerome Powell's remarks will be closely watched for signals on the pace and magnitude of the anticipated rate-cutting cycle.