Investing.com - European stock markets edged cautiously higher Wednesday, with investors wary about the possibility of a wider war in the Middle East while awaiting fresh regional employment data.
At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.1% higher, the CAC 40 in France rose 0.3% and the FTSE 100 in the U.K. climbed 0.3%.
Middle East conflict escalates
European stock markets received a negative handover from Wall Street after the troubles in the Middle East escalated with Iran launching a salvo of ballistic missiles on Israel in retaliation for its recent killing of Iran-backed Hezbollah leader Hassan Nasrallah and Israel’s deployment of ground forces into south Lebanon.
Iran has said its attack is over, barring further provocation, but Israel vowed a response, potentially dragging the United States, its backer, into the turmoil.
Eurozone unemployment data, ECB speakers due
Back in Europe, investors are set to digest more unemployment data as well as comments from a host of ECB speakers, including Vice President Luis de Guindos and chief economist Philip Lane.
The eurozone unemployment rate is expected to remain at 6.4% in August, and with the region’s inflation rate falling below the European Central Bank’s 2/0% target, according to data released on Tuesday, a quarter-point rate cut later this month looks all but assured.
Citigroup said, in a note released on Tuesday, that it now expects the ECB to cut interest rates by 25 basis points in its Oct. 17 meeting, and expects subsequent cuts in December and through the start of 2025 to take the policy rate to 1.5% by September 2025.
Nike withdraws revenue forecast
In the corporate sector, JD (NASDAQ:JD) Sports Fashion (LON:JD) stock fell 3% despite the British sportswear retailer beating the consensus forecast for first-half profit and saying it was on track to meet annual guidance.
However, there was less positive news overnight from Nike (NYSE:NKE), which is weighing heavily, after the sportswear giant withdrew its annual revenue forecast and postponed an investor day, just as a new CEO is set to take the helm.
Crude soars on Middle East violence
Oil prices rose Wednesday, continuing the previous session’s sharp gains as escalating tensions in the Middle East raised concerns that crude output could be disrupted from this oil-rich region.
By 03:05 ET, the Brent contract climbed 1.5% to $74.62 per barrel, while U.S. crude futures (WTI) traded 1.7% higher at $71.04 per barrel.
Both crude benchmarks surged more than 5% on Tuesday after Iran fired a salvo of ballistic missiles at Israel in retaliation for Israel's campaign against Tehran's Hezbollah allies in Lebanon.
Elsewhere, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, meets later in the session, but no changes to output are expected at this point.
U.S. crude inventories fell by about 1.46 million barrels for the week ended Sept. 27, compared with expectations of a decline of about 2.1M barrels, according to data from the American Petroleum Institute.
The official government inventory report is due later in the session.