European stock markets traded without a clear direction on Thursday as investors absorbed a heavy flow of corporate earnings alongside the U.S. Federal Reserve’s decision to leave interest rates unchanged.
By 08:10 GMT, Germany’s DAX was down 0.7%, while France’s CAC 40 advanced 0.9% and the UK’s FTSE 100 gained 0.6%.
Fed pauses again
The U.S. Federal Reserve kept its benchmark interest rate unchanged at the end of its latest policy meeting on Wednesday, extending a pause after a run of rate cuts late last year. Fed Chair Jerome Powell said policymakers needed more evidence that inflation was moving sustainably toward the 2% target before easing policy further, while stressing that economic growth remained resilient.
““Chair Powell’s decision to hold rates steady underscores a Federal Reserve that is increasingly cautious, internally divided, and intent on preserving credibility amid extraordinary political noise,” said David Millar, CIO at Catalyst Funds.
Pricing from CME’s FedWatch tool indicates markets expect rates to remain on hold in the near term, but still anticipate two further cuts later this year. In Europe, attention later in the session turns to January eurozone consumer confidence and business sentiment data, which are expected to show some improvement.
Earnings take centre stage
Corporate results were firmly in focus as the reporting season gathered pace across Europe.
Deutsche Bank (TG:DBK) posted a record pretax profit for the fourth quarter of 2025, driven by strength in its global investment banking activities, although the result was overshadowed by news of a police investigation linked to alleged money laundering.
Nokia (BIT:1NOKIA) reported a sharp drop in fourth-quarter operating margin to 8.8% from 14.4% a year earlier, weighed down by €299m in restructuring charges and integration costs following its Infinera acquisition. The group also warned that first-quarter 2026 net sales would “decline somewhat more than normal seasonality.”
Nordea Bank (BIT:1NDA) exceeded expectations at the net profit level for the fourth quarter, helped by stronger-than-anticipated net interest income and fee generation.
ING Group (LSE:ING) reported a record profit for 2025 and said it plans to continue returning around half of its capital generation to shareholders, outlining an outlook that points to stable income and returns through 2027.
ABB (BIT:1ABB) delivered a strong fourth quarter and issued upbeat guidance for early 2026, rounding off a record year marked by robust orders and margin expansion.
Roche (TG:RHO) said net profit jumped 58% in 2025 and forecast further growth in sales and earnings in 2026, supported by demand for newer medicines that offset pressure from patent expiries, currency effects and pricing reforms in China.
Sanofi (EU:SAN) said it expects sales to rise by a high single-digit percentage in 2026, underpinned by continued demand for its blockbuster asthma treatment Dupixent and newer drugs.
STMicroelectronics (NYSE:STM) posted a quarterly loss and warned of a sequential decline in first-quarter revenue, citing restructuring costs and weaker automotive demand.
Investors were also digesting major U.S. tech results. Meta Platforms (NASDAQ:META) shares jumped in after-hours trading after the company issued an upbeat revenue outlook tied to AI-driven advertising tools. Tesla (NASDAQ:TSLA) also beat expectations, offering support to growth stocks, while Microsoft (NASDAQ:MSFT) slipped as rising AI-related costs tempered sentiment.
Oil rallies on Iran risk
Oil prices surged on Thursday amid growing concern that the U.S. could carry out military action against Iran, potentially threatening supplies from the Middle East. Brent crude rose 1.3% to $68.26 a barrel, while U.S. West Texas Intermediate gained 1.5% to $64.18.
Both benchmarks are up around 5% since Monday and are trading at their highest levels since late September. President Trump has stepped up pressure on Iran over its nuclear programme, with reports suggesting he is considering new military action as a U.S. naval group arrives in the region. Iran is the fourth-largest producer in OPEC, pumping about 3.2 million barrels per day.
Oil markets have also been supported this week by supply disruptions in the U.S. caused by severe winter storms, with estimates indicating that at least 2 million barrels per day of production has been temporarily shut in.
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