Europe open: Stocks mixed as investors mull Nvidia results, US inflation

(Sharecast News) - European stocks were mixed in early trade on Thursday as investors mulled strong results from US chip maker Nvidia amid concerns about sticky US inflation.

At 0945 BST, the benchmark Stoxx 600 index was down 0.1% at 655.46, Germany's DAX was up 0.3% at 26,375.10 and France's CAC 40 was 0.3% lower at 8,435.12.

Market participants were digesting the latest earnings from Nvidia, whose shares were set to rally on Thursday after it reported a doubling of revenues in the second quarter and delivered sales guidance well ahead of market forecasts.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Nvidia delivered on pretty much all fronts and signalled AI demand is even stronger and last longer than thought. Shares trade +4.7% higher in out-of-hours trade after management guided 70% growth in fiscal 2028 versus current expectations of 45%. Customer forecasts point to growth doubling next year but supply constraints are dragging.

"A couple of potential headwinds were flagged - memory costs are set to pull gross margin from 75% towards 71-72%, bottoming out in the fourth quarter, while free cash flow fell 56% quarter-on-quarter. And Nvidia is far from immune to higher bond yields - for the first time the company broke out indebtedness as a risk factor. But lots of questions were answered both in the results and on the earnings call will keep investors happy."

Wednesday's US inflation print remained in focus, meanwhile. Susannah Streeter, chief investment strategist at Wealth Club noted that while headline inflation has dipped back, it's not such a benign picture if you look at the Fed's preferred measure, the Personal Consumption Expenditures Price Index.

"It captures a broader range of prices and spending behaviour, and it's still running hot - headline PCE is at 3.7%, while core PCE came in at 3.3%, above forecasts," she said. "That leaves the Fed with a tricky balancing act, with inflation still well above its 2% target just as signs of a cooling economy and a weakening jobs market come to the fore."

In equity markets, Pernod Ricard slumped as the French drinks maker reported a drop in annual sales, highlighting continued softness in the US and weak demand in China.

French civil engineering construction company Eiffage was also in the red after its first-half adjusted operating income came in below estimates.

Prudential lost ground despite raising its share buyback programme after reporting strong first-half results, which showed adjusted operating pre-tax profit at the insurance and asset management company were up 10% at $1.52bn.

The firm added $300m to its planned share repurchases, taking its total buyback plan for the year to $1.5bn. The interim dividend was also increased by 15%.