European equities inched higher on Wednesday as investors positioned themselves ahead of the U.S. Federal Reserve’s upcoming policy announcement and the release of regional inflation figures.
By 07:05 GMT, Germany’s DAX index had gained 0.5%, France’s CAC 40 rose 0.3%, and the U.K.’s FTSE 100 was up 0.1%.
Markets Focus on Fed
Attention across global markets, including European stocks, is centered on the conclusion of the Fed’s two-day meeting later today. The central bank is widely expected to lower interest rates, which has generally supported riskier assets.
Policymakers will also provide guidance on the trajectory of rates over the next year and release the quarterly Summary of Economic Projections. Markets are pricing in a near-certain 25-basis-point rate cut to bring the Fed’s benchmark rate to the 4.00%-4.25% range. Investors also anticipate additional easing, potentially totaling around 150 basis points by the end of next year.
“Equity markets are edging higher amid resilient business sentiment and the prospect of lower core borrowing costs,” noted analysts at ING.
Regional Inflation in Focus
Beyond the Fed, attention will also turn to eurozone inflation data. August CPI is forecast to rise 2.1% year-on-year, slightly above July’s 2.0%, and close to the European Central Bank’s target. The ECB kept rates unchanged last week but signaled flexibility regarding possible future cuts, citing uncertainties in trade, energy prices, and exchange rates.
In the U.K., inflation held steady at 3.8% annually in August, nearly double the Bank of England’s target, suggesting policymakers are likely to maintain current monetary settings when they meet on Thursday.
Trump Visits the U.K.
U.S. President Donald Trump is in the U.K. for a state visit, spending time at Windsor Castle with King Charles and Queen Camilla, and scheduled to meet Prime Minister Keir Starmer on Thursday.
During Trump’s visit, pharmaceutical giant GSK (LSE:GSK) announced plans to invest at least $30 billion in U.S. research, development, and manufacturing over the next five years. The investment includes $1.2 billion for advanced manufacturing, AI, and digital technologies to develop “next-generation biopharma facilities and laboratories,” the company said.
Meanwhile, Nestlé (BIT:1NESN) revealed that Chairman Paul Bulcke will step down earlier than planned, handing over leadership to former Inditex CEO Pablo Isla. The announcement accelerates a period of significant management change at the Swiss food and beverage company, maker of KitKat and Nescafé.
Oil Prices Slip from Two-Week Highs
Crude futures edged lower Wednesday, giving back some of Tuesday’s gains amid lingering concerns over potential disruptions to Russian supply.
At 03:05 ET, Brent crude fell 0.2% to $68.33 per barrel, while West Texas Intermediate declined 0.2% to $64.39 per barrel. Both benchmarks had jumped over 1% the previous session, reaching two-week highs, following fears that Russian exports could be impacted by Ukrainian drone attacks on key ports and refineries.
U.S. petroleum data also supported oil markets, showing an unexpected 3.2 million-barrel draw in inventories for the week ending September 12, according to the American Petroleum Institute. Official inventory figures are expected later Wednesday.
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