Bourses lower after comments from Fed’s Powell

European stocks followed their U.S. counterparts lower on Thursday morning after the Federal Reserve chairman hinted that lower rates may not be in the cards.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European Euro Stoxx 600 Index was lower 0.3% in early deals. Most major bourses were in negative territory with only the German DAX bucking the trend.

Volkswagen reported first-quarter earnings in line with expectations on Thursday, as the automaker attempts to increase the pace of its transformation. Shares rose 5% in morning trade.

BNP Paribas reported a net income of 1.92 billion euros ($2.15 billion) for the first quarter, a jump of 22% from the same period the year before. Shares were up 1%.

ING, the largest Dutch financial group, reported a slight drop in first-quarter underlying net profit of 1.12 billion euros ($1.26 billion), narrowly missing analyst expectations of 1.15 billion euros in a Reuters poll. Shares were down 1.5% on Thursday morning.

Aside from earnings, investors were digesting news from the Federal Reserve. Chairman Jerome Powell said in a news conference Wednesday that recently low inflationary pressures may only be “transitory,” dashing speculation the central bank was at least entertaining the idea of a rate cut because of tame inflation.

Meanwhile, investors in the U.K. will monitor a rate decision from the Bank of England on Thursday. There are also local elections being held in the country.

On the data front, factory activity in the euro zone contracted for a third month in April, according to IHS Markit, hit by weak global demand and rising trade protectionism, as well prolonged Brexit uncertainties.

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