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European stocks close lower as markets assess U.S. outlook; autos down 2.3%

Brendan Mcdermid | Reuters
  • European stocks closed lower Thursday as regional investors reacted to the U.S. Federal Reserve's latest monetary policy decision and U.S. inflation data.
  • All sectors traded in the red, with autos stocks leading losses, and hitting the lowest level in four months.

LONDON — European stocks closed lower Thursday as regional investors reacted to the U.S. Federal Reserve's latest monetary policy decision and U.S. inflation data.

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The Stoxx 600 index closed down 1.3%, tumbling from firm gains on Wednesday.

All sectors finished in the red, with autos stocks leading losses, trading down 2.3%, after hitting the lowest level in four months earlier in the session.

It came as the market digested a flurry of news from the sector this week, most notably the European Union's plan to place higher tariffs on Chinese electric vehicle makers and a U.K. probe into emissions claims.

Shares of beleaguered French IT group Atos initially dropped 14% after announcing the sale of its consultancy unit Worldgrid, before bouncing back into the green. The company this week agreed to a rescue deal set to majorly dilute existing shareholders.

Elsewhere, money transfer platform Wise's stock tumbled 15% before paring losses slightly, after the British fintech lowered its growth and margin guidance as part of its full-year results.

Global investors are, meanwhile, analyzing the Fed's decision Wednesday to hold the federal funds rate at 5.25% to 5.5% and to project only one rate cut this year.

That was down from the three cuts projected in its March meeting. However, the "dot plot" also indicated a more aggressive cutting path for 2025 — four rate cuts totaling a full percentage point are anticipated, up from three.

The move came after the latest U.S. inflation reading; the consumer price index stayed the same for the month of May, lower than the Dow Jones estimate for a 0.1% monthly increase. Year over year, the inflation yardstick increased 3.3%, which also came in below expectations.

The Fed's post-meeting statement said "inflation has eased over the past year but remains elevated," echoing language from the last statement. In the U.S., markets moved lower even as the S&P 500 hovered near a record levels.

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