European Markets Rise on US Government Spending Hope and Strong Corporate Earnings

European markets rose broadly on Wednesday, extending gains seen earlier this week amid optimism that the U.S. government shutdown may soon end. Investors are closely watching developments in Washington, where the Senate passed a spending bill Monday, now awaiting a final vote in the House of Representatives. This news has supported risk appetite across Europe, fueling positive momentum in major stock indices.

The pan-European Stoxx 600 Index climbed 0.6%, with most sectors in positive territory. Germany’s DAX surged 1.1%, France’s CAC 40 rose 0.9%, and Italy’s FTSE MIB, which recently surpassed its 2007 peak, added 0.9%. Meanwhile, the U.K.’s FTSE gave up early gains, dipping 0.1% by mid-morning, though it has been tracking all-time highs in recent sessions.

Corporate earnings also played a major role in driving market sentiment. The U.K. utility SSE jumped 10.4% after launching a £2 billion equity raise to fund a £33 billion, five-year electricity network upgrade, despite reporting slightly lower-than-expected half-year profits. Germany’s RWE gained nearly 2.9% after exceeding pre-tax income expectations, while chipmaker Infineon Technologies rose 6.5% following solid full-year revenues, meeting analysts’ forecasts. Other notable earnings releases on Wednesday included E.ON, Experian, Alcon, Bayer, Swiss Life, Poste Italiane, and ABN Amro.

In fixed income, U.K. gilt yields edged higher, with the 10-year benchmark up 3 basis points to 4.419%. Rising yields reflect increased borrowing costs for the government and can influence mortgage rates, investment returns, and broader economic activity. The British pound fell slightly, trading at $1.311 against the U.S. dollar and down 0.1% versus the euro, as investors reassessed risk amid global market movements.

Elsewhere, Asian markets saw pressure, with SoftBank Group shares dropping up to 10% after it sold its entire Nvidia stake for $5.83 billion. U.S. stock futures remained relatively flat, following a sell-off in tech names like Nvidia and selective gains in risk-off areas. Analysts note that while fears of a stock market bubble persist, investors are increasingly discerning about which tech giants are positioned to benefit from the AI race.

source: cnbc