European Stocks Rise Ahead of Key U.S. Inflation Data

European Stocks Rise Ahead of Key U.S. Inflation Data; Zara Owner Inditex Jumps 6%

European stocks ticked higher on Wednesday as investors positioned themselves ahead of a crucial U.S. inflation reading that could sway the Federal Reserve’s timing for rate cuts, while Spain’s Inditex — owner of Zara — led retail gains after reporting an improved start to its autumn sales season. The pan-European STOXX 600 rose roughly 0.4–0.5%, with retailers among the day’s best performers.

Inditex’s shares jumped about 6% in early trade after the fast-fashion giant said sales between Aug. 1 and Sept. 8 were up about 9% year-on-year on a currency-adjusted basis, a marked pick-up from the 5.1% growth it logged in the first half of the year. The stronger trading update helped to counter investor concern over second-quarter sales that had fallen short of analyst forecasts.

Traders said the market’s constructive tone was fragile and highly data-dependent. U.S. consumer price index figures due later in the week are seen as the most important near-term driver for global yields and risk assets: a hotter-than-expected print would push back bets on Fed easing and keep long-term borrowing costs elevated, while a softer reading would reinforce hopes for rate cuts and could extend the equity rally. European markets were also watching the European Central Bank meeting later in the week for fresh signals on the timing of policy moves. 

Retailers led sectoral gains across the region as investors rotated into consumer names that have been quick to show signs of trading resilience going into the autumn season. The outperformance of Inditex — which also flagged a currency headwind it said had trimmed its results this year — underlined a theme analysts have been stressing: selective exposure to companies with agile supply chains and rapid inventory turns can pay off in a patchy consumption environment. 

Beyond retail, healthcare and pharmaceuticals also saw flows into names perceived as defensive after a volatile start to September for bond markets. Novo Nordisk, which last week announced a major restructuring plan, was among the other movers on the STOXX 600, reinforcing the sense that company-specific news continues to drive much of the intraday dispersion even as macro events dominate headlines.

Market technicians noted that liquidity remains thinner than usual for this time of year, amplifying moves in individual names and sectors. That makes headline events — corporate trading updates, central-bank guidance and economic prints — more likely to trigger outsized intra-day swings. Traders said they were keeping position sizes under control ahead of the U.S. CPI release and the ECB’s staff projections, both of which could reshape expectations for the path of global interest rates.

For Inditex, the immediate task is converting the uplift in early-season sales into durable momentum for the full year. While the recent trading period gives management some breathing room after a softer first half, analysts cautioned that currency pressures and tariff frictions in some markets remain a watchpoint. Investors will be looking for more detail on margins and regional strength when Inditex reports fuller third-quarter metrics.

Looking ahead, portfolio managers said the dominant risks for European equities this week were external: an unexpectedly strong U.S. CPI print that forcefully re-prices Fed policy, hawkish surprise language from the ECB or renewed volatility in long-dated government bonds. On the positive side, stronger seasonal sales across major retailers would support consumer-exposure trades, and any dovish tilt from central banks could sustain a broader risk rally. 

What to watch next: U.S. CPI for August, ECB Governing Council comments and staff projections, auction results for core euro-area sovereigns, and the full quarterly trading updates from major European retailers. Those data points will likely determine whether this tentative rally broadens beyond a handful of earnings-led winners or fades as markets reassess the pace and scale of monetary easing.