European stocks were on track for a lower open on Wednesday as global investors shifted into cautious mode ahead of the U.S. Federal Reserve’s final interest rate decision of the year. Market sentiment across the region softened overnight as traders weighed the potential impact of another Fed rate move on global financial conditions.
Early projections from IG suggested modest declines across Europe’s major indices. The U.K.’s FTSE was set to open 0.34% lower, Germany’s DAX expected to dip 0.24%, and France’s CAC 40 forecast to slide 0.25%. Italy’s FTSE MIB was also poised for a 0.3% drop as investors prepared for a closely watched trading session.
Global markets have been laser-focused on the Fed’s upcoming announcement, with expectations leaning heavily toward a third consecutive quarter-point rate cut. Fed Funds futures currently show an 87.6% probability of a decrease, according to CME’s FedWatch tool. But the outlook remains far from united, as Federal Open Market Committee members remain split over the right course of action.
Some policymakers believe additional cuts are necessary to prevent further cooling in the U.S. labor market, while others worry that easing too quickly could reignite inflationary pressures. Investors will be paying close attention to Chair Jerome Powell’s press conference on Wednesday afternoon, hoping for clearer insight into the Fed’s thinking as the year comes to a close.
European confidence was further shaken this week after U.S. President Donald Trump criticized regional leaders in an interview, calling Europe “weak” and “decaying” amid ongoing debates over migration and the Ukraine conflict. His remarks come at a sensitive moment, as European governments push to keep their influence strong in peace negotiations. Meanwhile, markets will also digest earnings from travel giant TUI and fresh Italian industrial production figures.
source: cnbc