**European Stocks Poised for Slight Decline Amid Weak Chinese Data and Key Inflation Reports**
European stocks are set to open slightly lower on Friday as investors respond to disappointing Chinese data and await significant inflation reports from both the eurozone and the U.S.
Asian markets traded higher, buoyed by the weak Chinese Purchasing Managers' Index (PMI) data, which fueled expectations of stimulus support. Official data showed China's manufacturing activity unexpectedly contracted in May, with the PMI dropping to 49.5 from 50.4 in April. The non-manufacturing PMI, which gauges sentiment in the service and construction sectors, slipped to 51.1 from 51.2.
In the U.S., stock futures slid after Dell Technologies forecasted lower-than-expected profit for the current quarter. Treasury yields remained largely unchanged while the dollar weakened against major currencies ahead of crucial inflation data from the eurozone and the U.S. later today.
Gold prices held steady, poised for a fourth consecutive monthly gain. Meanwhile, oil prices continued to fall following the release of Energy Information Administration (EIA) data, which showed a significant increase in gasoline inventories for the week ending May 24th.
In terms of economic releases, U.K. house price data, France's consumer spending figures, and Consumer Price Index (CPI) data for the EU, France, and Italy are likely to draw investor attention later in the day.
Across the Atlantic, the U.S. Commerce Department will release its report on personal income and spending for April, which includes inflation metrics favored by the Federal Reserve. Economists anticipate a 0.3% rise in consumer prices for April, mirroring the increase seen in March, with the annual consumer price growth rate expected to remain steady at 2.7%. This data could significantly influence interest rate outlooks, as Federal Reserve officials have emphasized the need for "greater confidence" that inflation is slowing before they consider rate cuts.
Fed Bank of New York President John Williams stated on Thursday that he does not foresee an imminent need to cut interest rates.
U.S. stocks ended lower overnight as Salesforce reported disappointing quarterly results and revised data indicated that the U.S. economy grew less than initially estimated in the first quarter. The GDP growth figure for the first quarter was revised down to 1.3%, compared to the previously reported 1.6%. Additionally, weekly jobless claims rose more than expected, while pending home sales in April fell to their slowest pace since April 2020.
The Dow Jones Industrial Average declined by 0.9%, hitting its lowest closing level in nearly a month. The S&P 500 dipped 0.6%, and the tech-heavy Nasdaq Composite fell by 1.1%.
On Thursday, European stocks saw gains as bonds recovered some ground following a sell-off the day before. The pan-European STOXX 600 rose by 0.6%. The German DAX inched up by 0.1%, while France's CAC 40 and the U.K.'s FTSE 100 both increased by approximately 0.6%.
