European Stocks Rise as Global Markets Rally on Renewed Fed Rate-Cut Hopes

European stocks are set to open the week on a strong note, buoyed by a wave of optimism sweeping across global markets. The renewed confidence comes as investors grow more hopeful that the U.S. Federal Reserve could cut interest rates in December — a move many believe could bring relief to markets after weeks of volatility.

Market indicators suggest a positive start across major European exchanges. Early data from IG shows the U.K.’s FTSE 100 opening 0.55% higher, Germany’s DAX rising 0.8%, France’s CAC 40 up 0.76%, and Italy’s FTSE MIB expected to gain 0.72%. The upbeat sentiment mirrors overnight gains in Asia-Pacific markets and U.S. stock futures, all responding to comments from the head of the New York Federal Reserve, who signaled that a December rate cut remains on the table.

Investors now turn their focus to the Fed’s upcoming meeting scheduled for December 9–10. According to the CME FedWatch tool, markets are pricing in a 69.3% probability of a 25-basis-point cut. This renewed hope has energized traders after a turbulent period marked by doubts over the sustainability of high valuations in artificial-intelligence-driven technology stocks that have dominated 2025’s market momentum.

While Monday is expected to be quiet in Europe with no major data or earnings releases, attention in the U.K. is already shifting to Wednesday’s Autumn Budget. Market watchers are bracing for potential tax hikes as Finance Minister Rachel Reeves faces the challenge of balancing public finances amid rising economic pressures.

Geopolitical developments also remain in focus, particularly the ongoing negotiations between the U.S. and Ukraine on a new peace framework. Weekend talks, attended by U.S. Secretary of State Marco Rubio, reportedly made progress, although no agreement has been reached on Ukraine’s security guarantees. The discussions follow criticism of an earlier proposal seen as favorable to Moscow, prompting renewed diplomatic engagement.

source: cnbc