News that inflation in the Eurozone increased to 3.2% did little to cheer market sentiment in Europe. This rise in inflation leaves Europe in a difficult situation with the prospect of lower growth and higher inflation.
In the US, the Fed has aggressively cut interest rates from 5.25% to 3%. The Fed is hoping that the rate cuts will prevent a recession. However, the rise in Euro inflation means that the ECB has less scope for cutting to rates to help boost growth and support declining stock markets.