European Stocks Slip Ahead of Fed Rate Decision as Investors Eye Powell’s Comments and Tech Earnings

European stocks are poised to open lower on Wednesday as investors tread cautiously ahead of the U.S. Federal Reserve’s much-anticipated interest rate decision. Market sentiment remains subdued, with traders awaiting signals on whether Fed Chair Jerome Powell will maintain a dovish tone following the expected policy move.

Futures data from IG show that London’s FTSE 100 is set to open slightly below the flatline, while Germany’s DAX is projected to fall 0.4%. France’s CAC 40 is expected to edge 0.16% lower, and Italy’s FTSE MIB could see a 0.12% drop. The cautious start reflects widespread uncertainty over the Fed’s outlook as global markets adjust to shifting monetary policy expectations.

The Federal Open Market Committee (FOMC) is widely expected to announce a quarter-point rate cut, bringing the federal funds rate down to a range between 3.75% and 4.00%. According to the latest CNBC Fed Survey, 84% of respondents anticipate another cut in December, with over half predicting an additional reduction by January. Analysts now expect a total of 100 basis points of cuts between 2025 and 2026, which could lower rates to around 3.2% by the end of next year.

Meanwhile, corporate earnings remain a major driver of market sentiment. U.S. tech giants Alphabet, Meta Platforms, and Microsoft are all set to release quarterly results after the U.S. close on Wednesday, while Apple and Amazon will follow on Thursday. In Europe, heavyweights including Airbus, UBS, Banco Santander, Deutsche Bank, Adidas, and BASF are scheduled to report earnings on Thursday, alongside fresh data such as Spain’s GDP figures.

Adding to the global picture, U.S.-China trade relations show tentative signs of easing ahead of President Donald Trump’s meeting with Chinese President Xi Jinping on Thursday. Trump has indicated plans to reduce certain tariffs linked to fentanyl-related products, signaling a potential thaw in economic tensions. Still, traders remain focused on the Fed’s decision as the key catalyst for short-term market direction.

source: cnbc