Following Wall Street's poor performance overnight, European stock markets are anticipated to begin broadly lower on Friday.

Following Wall Street's poor performance overnight and in anticipation of more monetary policy clues from the Jackson Hole Symposium, European stock markets are anticipated to begin broadly lower on Friday.

On Thursday, the major U.S. indexes suffered significant losses despite Nvidia's solid earnings due to concerns about further hawkish signals from the Federal Reserve, especially because Chair Jerome Powell was scheduled to appear at the Jackson Hole Symposium later in the afternoon.

This lack of risk-taking resulted in losses early on Friday in Asia, and it is probable that the European indexes will mainly follow suit.

The Fed must decide whether to increase interest rates once again or maintain their current level after doing so in July when they meet. The next policy meeting is in September, and despite recent lowering in inflation readings, the Fed's 2% annual objective for inflation still hasn't been reached.

The weekly numbers on unemployment insurance released on Thursday also served as a reminder that the U.S. labour market is still tight, giving the Fed little relief.

Over in Europe, the problem of inflation persists, despite the fact that recent figures on corporate activity in Europe indicate worsening economic hardship.

According to figures released on Friday, Germany's gross domestic product remained unchanged in the second quarter, representing an annual decline of 0.2%, as the country's largest economy struggled with a sharp decline in manufacturing production.

When the European Central Bank meets again in September, JPMorgan now anticipates that it will stop its tightening cycle, with the final 25 basis point increase occurring in October rather than September as it had previously forecast.

Although oil prices recovered somewhat on Friday, they are still heading for a second straight week of losses due to worries about slowing Chinese demand, rising U.S. production, and a stronger currency.

The dollar increased earlier on Friday in anticipation of Federal Reserve Chair Jerome Powell's address at the Jackson Hole symposium, reaching its highest level since early June. The dollar's strength affects the oil market by making petroleum more expensive for foreign customers.

(Sources: investing.com, reuters.com)