European tech firms, online retailers jump after U.S. CPI falls in November

© Reuters.

By Scott Kanowsky 

Investing.com -- European tech and digital retail stocks rallied on Tuesday after key U.S. data showed headline inflation in the world's largest economy fell by more than expected in November, boosting hopes that the Federal Reserve will slow its pace of interest rate hikes.

The STOXX Europe 600 Technology gained more than 3%, helped on by an uptick in semiconductor manufacturers like Infineon Technologies AG NA O.N. (ETR:IFXGn) and Siltronic AG (ETR:WAFGn).

Meanwhile, Dutch payment firm Adyen NV (AS:ADYEN) jumped by more than 4%. Big increases were also seen in online food stocks, including Germany's Delivery Hero AG (ETR:DHER) and peer HelloFresh SE (ETR:HFGG).

Consumer prices rose 0.1% from October and were up 7.1% from a year earlier, the Bureau of Economic Analysis said, as a drop in energy prices took the sting out of another chunky increase in shelter costs. Excluding volatile fuel and energy components, the 'core' CPI index rose 0.2% on the month and 6.0% on the year, representing a clear slowdown from October's 6.3%.

The numbers bolstered expectations that the Fed will be able to soften its guidance on Wednesday when chair Jerome Powell announces what is predicted to be a fresh increase in the target range for fed funds.

"This doesn’t alter the outlook for a 50bp rate hike tomorrow, but it does bring into question how much further rates will rise in 2023," analysts at ING said in a note. "This is a tricky situation for the Fed which has been telling us to expect a higher peak in rates than it was signaling in September."