European Stocks Edge Higher Ahead of U.S. Federal Reserve Rate Cut Decision
European equity markets opened in positive territory on Wednesday as global investors awaited the U.S. Federal Reserve’s latest policy decision. The central bank is widely expected to trim interest rates later in the day, a move that could ease borrowing costs and support risk appetite worldwide. The pan-European Stoxx 600 index rose 0.2% in early London trade, with most sectors showing gains. Germany’s DAX led regional benchmarks, climbing 0.5% by mid-morning.
British blue chips also traded higher, with the FTSE 100 up 0.21% at 9,214.83 points. France’s CAC 40 and Spain’s IBEX 35 inched up 0.02% and 0.03%, respectively, while Italy’s FTSE MIB slipped 0.46%. Retail names were among the standout performers: Marks & Spencer and Sainsbury’s jumped 3.2% and 2.9% on upbeat sentiment and fresh corporate developments. Sainsbury’s continued its rally after ending talks to sell its Argos brand to China’s JD.com.
Fresh U.K. inflation data also shaped investor mood. Annual price growth held steady at 3.8% in August, while food inflation accelerated to 5.1% and alcohol and tobacco prices rose 5.9%. Traders viewed the figures as reinforcing expectations that the Bank of England may pause further rate hikes, adding to the positive tone in London equities.
Defense stocks were another bright spot after reports that Indian troops joined military drills with Russian and Belarusian forces near Minsk. The Stoxx Aerospace and Defense index rose 0.3% in early trade. Germany’s Rheinmetall gained 2.5%, Hensoldt added 1.9%, and Sweden’s Saab climbed 2.3% as investors bet on higher European defense spending.
Globally, markets remained focused on the Fed’s upcoming announcement. Analysts polled by CME’s FedWatch tool expect a 25-basis-point cut and will scrutinize the “dot plot” for clues about future policy moves. The backdrop also includes U.S.–China trade talks in Madrid and U.S. President Donald Trump’s state visit to the U.K., which features meetings with King Charles and Queen Camilla at Windsor Castle before talks with Prime Minister Keir Starmer on Thursday.
source: cnbc