European stock markets edged down modestly on Wednesday as investors processed a wave of corporate earnings and awaited critical regional growth figures alongside the wrap-up of the latest Federal Reserve meeting.
By 07:02 GMT, Germany’s DAX slipped 0.2%, France’s CAC 40 fell by 0.2%, and the UK’s FTSE 100 declined 0.4%.
Second-quarter earnings roundup
The recently announced trade deal between the U.S. and the European Union over the weekend has provided a boost to sentiment among European companies. However, uncertainty tied to the Trump administration’s unpredictable trade tactics has already influenced corporate profits in Q2.
Switzerland’s largest bank, UBS (NYSE:UBS), saw its second-quarter earnings more than double compared to last year, benefiting from heightened trading volumes amid turbulent markets.
HSBC (LSE:HSBA) posted a 27% drop in first-half profits, impacted by one-time charges linked to its investment in China’s Bank of Communications, though it also unveiled a new $3 billion share buyback program.
Adidas (TG:ADS) revealed that increased U.S. tariffs are expected to add about €200 million ($231 million) in costs during the second half of the year, noting the impact had already shaved “double-digit” millions of euros from its Q2 results.
Mercedes-Benz (TG:MBG) projected a 4% to 6% profit margin for its automotive division this year, down from its April forecast in the company’s first estimate of losses caused by the U.S. trade conflict.
Porsche (BIT:1PORS) revised downward its full-year profit forecast after reporting a €400 million ($462 million) tariff-related hit in the first half.
Luxury car maker Aston Martin (LSE:AML) lowered its profit expectations, citing “evolving and disruptive” U.S. tariffs and now anticipates adjusted operating profit will roughly break even.
France’s Danone (EU:BN) beat expectations with second-quarter sales growth, fueled by strong demand for infant formula and medical nutrition in China, which offset weaker performance in the competitive U.S. coffee creamer market.
French luxury brand Hermès (EU:RMS) posted a 9% increase in quarterly sales, reflecting continued strong demand for its iconic Birkin handbags among wealthy buyers.
Mining giant Rio Tinto (LSE:RIO) reported its smallest first-half underlying profit in five years, as soft iron ore prices driven by oversupply and weaker Chinese demand offset gains from its copper segment.
French IT consultancy Capgemini (EU:CAP) narrowed its full-year outlook, expressing caution amid a slowdown in Q2 demand.
Investors will also keep a close watch on major U.S. tech earnings, with Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) set to release their results after markets close Wednesday.
Eurozone growth data in spotlight
Economically, the key focus in Europe is the preliminary estimate of second-quarter GDP growth for the eurozone, as markets look for clues on the European Central Bank’s future rate moves.
Earlier Wednesday, data showed France’s economy expanded by 0.3% in Q2, surpassing forecasts thanks to a rebound in household spending, strengthening the eurozone’s second-largest economy.
Meanwhile, German retail sales rose 1.0% in June compared to the previous month, beating expectations ahead of the release of Germany’s Q2 GDP figures.
Last week, the ECB kept its main interest rate steady at 2%, pausing after a year of easing to await greater clarity on Europe’s trade ties with the U.S.
Across the Atlantic, the Federal Reserve is expected to keep rates unchanged as its policy meeting concludes later today.
Oil prices steady amid Russia sanctions watch
Oil markets paused on Wednesday after sharp gains the previous day, as traders awaited developments on potential new sanctions against Russia aimed at pressuring an end to the Ukraine conflict.
At 03:02 ET, Brent crude futures ticked up 0.1% to $71.77 a barrel, with U.S. West Texas Intermediate crude futures also rising 0.1% to $69.29 a barrel.
Both benchmarks had closed Tuesday at their highest levels since June 20, jumping over 3% following President Trump’s announcement that he would impose additional sanctions on Russia if progress toward ending the war was not made within 10 to 12 days, shortening the earlier 50-day deadline.
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