Europe Markets

European stocks close higher as U.S. inflation data dominates week ahead

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Key Points
  • Europe's Stoxx 600 index ended Monday's session up about 0.2%.
  • Investors around the world are looking ahead to the release of key U.S. inflation data on Thursday.
  • IWG sank to the bottom of the pan-European benchmark after warning of a sharp drop in profits.

European stocks closed slightly higher Monday, despite fears over rising inflation.

The pan-European Stoxx 600 index ended the session up about 0.2%. Autos shares were the best performers, climbing 0.9%, while basic resources were the laggards, slipping 1.6%.

Investors around the world are looking ahead to the release of key U.S. inflation data on Thursday. In April, the Consumer Price Index (CPI) rose 4.2% from the previous year, the fastest increase since 2008.

If Thursday's data shows prices continuing to rise in May, traders fear that could cause the Federal Reserve to step back from its loose policies.

On Wall Street, U.S. stocks moved mostly lower Monday as investors digested the latest labor market data and looked ahead to the next inflation reading on Thursday.

Friday's jobs report showed the unemployment rate dropping to 5.8% from 6.1% and that 559,000 jobs were added in May. The report was seen as strong enough to keep investors' confidence in the economy, but light enough to keep the Federal Reserve from rushing to change its easy money policies.

Investors around the world will be assessing the ramifications of the G-7 nations reaching an agreement on global tax reform, calling for the world's largest corporations to pay at least a 15% tax on their earnings.

That's lower than the Biden administration's initial suggestion of a minimum 21% tax rate, which didn't garner much enthusiasm in other countries. Major companies including Facebook and Google have responded favorably to the agreement.

Looking at individual stocks, shared office provider IWG sank over 10% to the bottom of the Stoxx 600, having fallen as much as 16% earlier in the day after warning of a sharp drop in profits due to the emergence of new Covid variants.

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- CNBC's Ryan Browne, Tanaya Macheel and Eustance Huang contributed reporting to this story.