(Bloomberg) -- European stocks traded lower ahead of Nvidia Corp. earnings later today, while UK equities declined after data showed that inflation cooled less than expected last month, threatening to delay interest rate cuts. Meanwhile, the BBC reported that UK Prime Minister Rishi Sunak is likely to call an election for July 4.

The Stoxx 600 Index was 0.3% lower at the close in London, led by basic resources as miners fell after copper retreated for a second day and automotive stocks, which underperformed after China hinted at a levy on cars from the European Union. The FTSE 100 Index retreated 0.6% after inflation data dampened hopes for a June Bank of England rate cut. 

The UK Consumer Prices Index rose 2.3% from a year ago in April, down from 3.2% the previous month but at the upper end of what economists were expecting. The recent surge in the stock index was fueled in part by expectations that the Bank of England would begin monetary easing as soon as next month. 

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“The mixed inflation report this morning keeps the Bank of England in limbo for a cut in June,” said Matthew Landon, a global market strategist at JPMorgan Private Bank. “Barring major downside surprises in the May inflation print and labor market data between now and June 20th, expect the market to start moving toward an August base case.”

In Europe, the focus is on artificial intelligence-bellwether Nvidia, seen as key to gauging the outlook for the AI boom. The firm is projected to report a 243% gain in revenue in the latest quarter, which ran through April, according to Wall Street estimates.

Better-than-expected earnings this season and expectations that the European Central Bank will cut rates before the Federal Reserve have helped European stocks resume a rally to trade near record highs.

“Beyond Nvidia results, the tone is quite positive for riskier assets with good corporate growth and an expected normalization of monetary policy,” said Francisco Simón, European head of strategy at Santander Asset Management. “We may see some volatility in the inflation data, as was the case today in the UK, but the disinflation process is clear and the rate reduction trend too.”

Among individual movers, Marks & Spencer Group Plc jumped after the British retailer said it’s in the strongest financial health since 1997. 

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--With assistance from Michael Msika and Allegra Catelli.

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