European shares mixed as U.S. inflation data fuels rate cut bets; Zara owner Inditex up 6%

European stocks were mixed on Wednesday as investors assessed the latest trade news, corporate earnings and inflation data.

The pan-European Stoxx 600

 index was 0.02% higher by 3:30 p.m. (10:30 a.m. ET) in London, losing most of its earlier gains. Germany’s DAX

 slipped 0.3% while France’s CAC 40

 was 0.25% higher, even with the country facing widespread protests as its new prime minister was sworn in.

The muted performance came despite strong gains on Wall Street, with the S&P 500

 index at a record high, after a softer-than-expected inflation print cemented expectations for the Federal Reserve to resume interest rate cuts this month.

A series of recent data releases showing signs of a slowdown in the labor market have raised the possibility of the central bank opting for a bigger half-percentage point cut rather than the expected quarter-point reduction.