European Stocks Steady as Investors Eye Corporate Earnings and Fed Decision
European stock markets remained stable on Wednesday as investors assessed key corporate earnings ahead of the Federal Reserve’s policy announcement.
Markets Mixed in Early Trading
As of 03:05 ET (08:05 GMT), Germany’s DAX gained 0.4%, while France’s CAC 40 dipped 0.4%, and the UK’s FTSE 100 slipped 0.2%.
German Consumer Confidence Declines
European equities traded with little movement midweek, stabilizing after recent volatility, as markets looked ahead to Thursday’s European Central Bank (ECB) meeting.
The ECB is widely expected to cut interest rates by 25 basis points, following last year’s four reductions, in an effort to support sluggish economic growth.
Meanwhile, fresh data released Wednesday signaled weakening German consumer confidence. The GfK consumer sentiment index, compiled with the Nuremberg Institute for Market Decisions, unexpectedly fell to -22.4 points from a revised -21.4 points the previous month, reflecting increased economic pessimism among households.
Fed Meeting in Focus
Later Wednesday, the Federal Reserve will wrap up its two-day policy meeting, with markets anticipating no change in interest rates as inflation remains above the central bank’s 2% target.
This decision follows former U.S. President Donald Trump’s virtual speech at the World Economic Forum in Davos, where he called for immediate rate cuts.
ASML Lifts Sentiment with Strong Q4 Results
Dutch semiconductor giant ASML (AS:ASML) delivered impressive fourth-quarter results, boosting investor sentiment after a turbulent week for global tech stocks. The earlier sell-off followed the highly successful launch of Chinese startup DeepSeek’s R1 reasoning model. ASML Surges 10% on Strong Demand, While Luxury and Spirits Stocks Struggle
Shares of ASML (AS:ASML) soared 10% after the leading supplier of semiconductor manufacturing equipment reported significantly stronger-than-expected demand for its most advanced tools in the fourth quarter. This comes despite concerns that DeepSeek’s low-cost AI model could impact future AI-related spending.
Luxury and Spirits Stocks Decline
Meanwhile, LVMH (EPA:LVMH) shares fell 4%, as the luxury giant’s latest sales figures failed to impress investors following a streak of robust results from competitors and recent stock price gains.
Remy Cointreau (EPA:RCOP) slid 3% after the French spirits producer warned that full-year 2024/25 group sales could decline by close to 18%, hitting the lower end of its previous forecast. The company cited weak U.S. demand and worsening market conditions in China, making recovery prospects uncertain.
Akzo Nobel (AS:AKZO) also dropped 3%, as the Dulux paint maker delivered a disappointing outlook for 2025 core earnings growth, anticipating no significant market rebound in the near term.
In contrast, AB Volvo (OTC:VLVLY) rose 2%, despite reporting a sharper-than-expected decline in fourth-quarter operating profit. The Swedish truckmaker lifted sentiment by raising its dividend payout.
Crude Oil Steady Amid Rising US Stockpiles
Oil prices remained steady on Wednesday, as higher U.S. crude inventories weighed on sentiment, adding to global growth concerns amid potential new U.S. tariffs.
By 03:05 ET, U.S. crude futures (WTI) edged up 0.1% to $73.84 per barrel, while Brent crude dipped 0.1% to $76.47 per barrel.
Industry data from the American Petroleum Institute (API) showed that U.S. crude inventories grew by 2.86 million barrels last week, following nine consecutive weeks of draws. The increase was driven by cold weather boosting heating demand, alongside higher travel activity over the year-end holidays.
Traders now await the official weekly report from the U.S. Energy Information Administration (EIA) later in the session.
Oil prices had fallen to multi-week lows earlier this week, pressured by concerns over rising U.S. crude output, the Trump administration’s proposed trade tariffs, and weaker economic data from China.
