European Markets Mixed as Investors Weigh Economic Uncertainty and Earnings Outlook

European markets opened on a mixed note Thursday, reflecting ongoing volatility across global exchanges. The pan-European Stoxx 600 edged slightly above the flatline in early trading, as investors digested economic data, political developments, and corporate earnings reports. The FTSE 100 in London dropped 1% after the opening bell, while Germany’s DAX and Italy’s FTSE MIB slipped around 0.3% and 0.2% respectively. France’s CAC 40 also declined by about 0.2%, indicating a cautious mood among European investors.

The choppy week follows a two-week low for major European indices earlier in the week, offset by a sharp rebound on Wednesday. France’s CAC 40 led those gains, climbing 2% to mark its strongest daily performance since May. The rally came after newly appointed Prime Minister Sebastien Lecornu announced a suspension of President Emmanuel Macron’s controversial pension reform until after the 2027 election — a move seen as an effort to calm political unrest and restore investor confidence.

Across the Atlantic, U.S. stock futures held steady overnight after a round of upbeat bank earnings temporarily shifted investor attention away from domestic risks. The ongoing U.S. government shutdown, now in its third week, and rising trade tensions with China continue to cast a shadow over global sentiment. Analysts say the earnings season will be key to gauging how well corporations are managing higher borrowing costs and geopolitical headwinds.

In Asia, stocks closed broadly higher, with South Korea’s Kospi index reaching a record high. The boost followed an updated forecast from the International Monetary Fund (IMF), which raised South Korea’s 2025 growth outlook to 0.9% from 0.8%, citing resilient exports and strong tech sector performance. Broader optimism across the Asia-Pacific region helped lift global investor sentiment ahead of Thursday’s European session.

Looking ahead, European traders are focused on earnings from Nordea Bank, EQT, and ABB, alongside fresh U.K. GDP data expected later in the day. Meanwhile, attention also turns to the IMF and World Bank meetings in Washington, with scheduled interviews featuring key policymakers including Bundesbank President Joachim Nagel, Bank of France Governor François Villeroy de Galhau, and Eurogroup President Paschal Donohoe. Market participants hope these discussions will shed light on monetary policy direction amid persistent economic uncertainty.

source: cnbc