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Investing.com - European stock markets edged higher Wednesday amid cautious activity ahead of the release of the latest U.S. inflation report, which could offer possible clues on the outlook for Federal Reserve policy.

At 03:05 ET (08:05 GMT), the DAX index in Germany gained 0.2%, the CAC 40 in France climbed 0.4% and the FTSE 100 in the UK rose 0.1%.

US inflation in spotlight

Investors are focusing squarely Wednesday on the upcoming release of U.S. consumer inflation data, which is expected to offer fresh clues on the Fed’s interest rate trajectory, and thus likely economic growth in the world’s largest economy.

The gauge is projected to show that headline consumer price growth cooled on a month-on-month basis in January and equaled December's annualized pace.

So-called core inflation , which strips out more volatile items like food and fuel, is tipped to accelerate slightly from the prior month.

In December, consumer prices rose by 2.9% year-on-year, above the central bank's target level of 2%.

This will be the last inflation reading before any direct impact from President Donald Trump's tariff measures, which went into effect this month.

Jerome Powell appeared before the Senate on Tuesday, as part of his two-day testimony on Capitol Hill - he will appear before the House Financial Services Committee later Wednesday.

In his prepared testimony Tuesday,  the Fed chairman reiterated that the Federal Reserve does “not need to be in a hurry to adjust our policy stance.”

ECB sees more rate cuts ahead

Back in Europe, the ECB cut interest rates at the end of last month, its fifth reduction since June, and kept the door open to further policy easing given concerns over lackluster economic growth.

The European Central Bank may still be several interest rate cuts away from the level where it stops holding back economic growth, it said in a paper late last week.

Heineken reports strong profit growth

There are more quarterly corporate earnings for investors to digest Thursday.

Heineken (AS: HEIN ), the world’s second-largest brewer, reported annual profit growth that exceeded both forecasts and its own outlook, citing growth in its portfolio of premium-priced beers.

Randstad (AS: RAND ), the world's largest employment agency, reported a quarterly core profit above market expectations, citing its resilient business model and robust underlying performance in difficult market conditions.

Siemens (ETR: SIEGn ) Energy (ETR: ENR1n ) reported a record order book, boosted by strong demand for its energy equipment, ranging from gas and wind turbines to power converter stations and electrolysers.

Swiss lift and escalator maker Schindler (SIX: SCHN ) forecast low single-digit revenue growth in local currency terms for 2025, citing a difficult environment for new construction activity.

Ahold Delhaize (AS: AD ) said it is cautiously optimistic about 2025 despite market volatility, with the Dutch retailer anticipating continued progress in key financial and operational areas.

Crude falls after surge in US stockpiles

Oil prices edged lower Wednesday, retreating from a two-week high as an industry report pointed to an unexpected surge in U.S. crude stockpiles, weighing on sentiment.

By 03:05 ET, the US crude futures (WTI) slipped 0.7% to $72.83 a barrel, while the Brent contract fell 0.6% to $76.56 a barrel.

The declines snapped a three-day streak of gains for prices, which had seen prices climb to a two-week high.

U.S. crude oil inventories saw a massive surge last week, rising by 9 million barrels for the week ending January 31, according to the latest data from the American Petroleum Institute .

The sharp increase significantly outpaced economists’ forecasts of a 2.8 million barrel build, and indicated potential weakness in demand.

Market participants now await the U.S. Energy Information Administration’s official inventory report , set for release later in the session.