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European equities pushed higher on Wednesday, lifted by growing confidence that the Federal Reserve will deliver a rate cut in December as investors also await the U.K. Autumn Budget.

As of 08:02 GMT, Germany’s DAX was up 0.6%, France’s CAC 40 gained 0.6%, and the U.K.’s FTSE 100 added 0.1%.

Fed expectations fuel market optimism

Stocks across Europe tracked gains in the U.S. and Asia as traders increased their bets on a Fed cut at the central bank’s upcoming Dec. 9–10 meeting.

On Tuesday, the S&P 500 logged a third straight advance after softer-than-expected retail sales and weakening consumer confidence reinforced views that the Fed may soon ease monetary policy. According to CME’s FedWatch tool, markets are assigning an 82.7% probability of a 25-basis-point cut at next month’s meeting—up sharply from 43.4% just a week ago.

All eyes on the U.K. Budget

With little European economic data scheduled for release, attention is turning to the U.K. government’s fiscal plan due later in the day. Finance Minister Rachel Reeves is widely expected to introduce additional tax measures aimed at reassuring markets ahead of a potential downgrade to the nation’s economic outlook.

“We expect the Chancellor, Rachel Reeves, to raise taxes by about £38bn ,,, which will trim GDP growth, weigh on inflation and contribute to more interest rate cuts,” said Ruth Gregory, Deputy Chief UK Economist at Capital Economics. “That is likely to be received warmly by the markets and could prevent Reeves from having to come back with more tax rises next year.”

The Bank of England meets in mid-December and is broadly expected to reduce rates by 25 basis points to 3.75%, anticipating that the tax measures in the budget will require further monetary support. That expectation was reinforced by a YouGov survey for Citi showing inflation expectations for the year ahead dropped to 3.7% in November from 4.2% the prior month. Longer-term expectations also declined, easing to 3.9% from 4.2%.

AstraZeneca in focus after U.S. drug approval

Corporate news in Europe is otherwise limited, but AstraZeneca (LSE:AZN) is likely to draw attention after U.S. regulators approved its cancer therapy Imfinzi for certain resectable stomach and gastroesophageal junction cancers.

Oil steadies near recent lows

Crude prices were little changed Wednesday, hovering near the lowest levels in more than a month as traders weighed the possibility of a supply surplus and renewed optimism around a Russia-Ukraine peace framework.

Brent slipped 0.1% to $61.75 a barrel, while U.S. West Texas Intermediate dipped 0.4% to $57.90. Both benchmarks weakened on Tuesday after President Volodymyr Zelenskiy told European officials he was ready to move forward with a U.S.-supported plan to end the conflict—potentially enabling Russian oil to flow more freely onto global markets.

U.S. crude inventories declined last week, according to the American Petroleum Institute, with official Energy Information Administration stockpile figures expected later Wednesday.

The U.S. Food and Drug Administration has approved AstraZeneca’s (LSE:AZN) immunotherapy Imfinzi (durvalumab) for adults with resectable stomach and gastroesophageal junction (GEJ) cancers. The treatment is authorized for use alongside standard chemotherapy before and after surgery, and then as a standalone therapy in the post-surgical phase, the company announced Wednesday.

The decision is supported by data from the Phase III MATTERHORN study, which demonstrated that combining Imfinzi with chemotherapy reduced the risk of cancer recurrence, progression, or death by 29% compared with chemotherapy on its own. The regimen also led to a 22% reduction in the risk of death. Three years after treatment, 69% of patients receiving the Imfinzi-based protocol were still alive, versus 62% in the chemotherapy-only group.

MATTERHORN enrolled 948 participants across 176 medical centers in 20 countries. Patients received several cycles of Imfinzi plus chemotherapy ahead of surgery, followed by additional combination cycles afterwards, and then up to 10 cycles of Imfinzi alone. The study primarily evaluated disease-free survival and overall survival outcomes.

Safety profiles were consistent across both treatment arms: serious side effects occurred in about 72% of patients in each group, and most participants were able to undergo their scheduled operations.

Stomach cancer remains one of the most fatal cancers globally, ranking as the fifth-leading cause of cancer-related deaths and accounting for nearly one million new cases per year. Despite available treatments, recurrence rates are high, and fewer than half of patients survive five years post-diagnosis. In 2024, an estimated 6,500 U.S. patients received drug therapy for early-stage stomach or GEJ cancer.

The FDA evaluated Imfinzi under Project Orbis, a collaborative framework that enables simultaneous regulatory reviews across multiple countries. The therapy is also being considered by regulators in Australia, Canada, Switzerland, the EU, Japan, and several other jurisdictions.

Imfinzi is designed to enhance the immune system’s ability to identify and destroy cancer cells and already carries approvals for a range of other malignancies, including liver, bile duct, lung, and bladder cancers.

Bank of America Securities says the recent sharp retreat in European defense shares has created a potentially attractive entry point, noting that the sector has undergone a pronounced de-rating over the past three months.

According to the brokerage, the sector’s valuation premium over the STOXX Europe 600 has fallen dramatically as German order volumes failed to match elevated expectations and several 2026 outlooks — including Hensoldt’s — disappointed. Defense stocks, which had previously traded at a 120–130% premium following the Munich announcements and NATO’s 3.5% GDP target, have now dropped back to about a 70% premium to the SXXP.

BofA highlighted that European defense companies are currently valued at 11.6x EV/EBIT based on 2028 estimates, with zero net leverage at a sector level — a setup the firm considers “highly attractive if defence budget growth persists.” It added that long-term spending trends remain supportive and that the sector’s pullback represents an “attractive entry point.”

The brokerage noted that valuation swings have been substantial: from an early-2025 premium of 36%, to a post-NATO surge, and now a meaningful retracement. Prior to COVID-19, the sector typically traded at a 20% premium during budget expansions and a 20% discount in downturns, while the war in Ukraine pushed valuations into elevated ranges of 20–50% premia.

Despite the pullback, BofA remains constructive on the fundamentals. It forecasts average organic revenue growth of roughly 12.5% from 2025 to 2030, around 280 basis points of margin expansion, and an EPS CAGR near 20%. If NATO members were to raise defense spending to 3.5% of GDP, the bank estimates an additional $310 billion in demand — or about $187 billion at a 3% target compared with 2025 levels.

Looking ahead, BofA expects 2026 to set a record for book-to-bill ratios as European governments continue rebuilding defense manufacturing capacity. Companies have also indicated that growth is likely to accelerate between 2027 and 2029 as new capacity comes online.

Although diplomatic negotiations continue — with the Financial Times recently reporting Ukraine’s agreement to a clause capping peacetime troop levels at 800,000 — BofA said a cease-fire would not alter its long-term view of European defense expenditures. In its assessment, the recent selloff reflects expectations of stabilization rather than renewed acceleration, and current valuations do not fully account for the growth it projects.

Pets at Home Group Plc (LSE:PETS) has released its interim results for FY26, reflecting a mixed performance across its business segments. Retail conditions remained difficult, with consumer revenue down 2.3%, while the Vet Group continued to outperform, delivering 6.7% growth. In response to retail softness, the company is rolling out a comprehensive turnaround plan focused on product, pricing, execution, and cost discipline to stabilise performance and restore momentum. Overall statutory revenue declined 1.3%, and statutory profit before tax fell 29.1% for the period. Nevertheless, progress continues across key strategic initiatives, including upgrades to its digital platform, expansion of vet practices, and a restructuring programme aimed at achieving £20 million in overhead savings, with full benefits expected from FY27 onwards.

Despite the operational challenges, Pets at Home maintains solid underlying financial characteristics, with consistent revenue generation and strong cash flow management supporting stability. Technical indicators currently signal a neutral trend, while valuation remains appealing given a reasonable P/E ratio and an attractive dividend yield. The lack of recent earnings-call data or corporate updates does not materially alter the outlook.

More about Pets at Home

Pets at Home Group Plc operates across the UK pet care market, offering pet food, accessories, grooming, and veterinary services. Its integrated model — combining retail stores, veterinary practices, and digital platforms — is designed to serve a large and loyal customer base with comprehensive pet care solutions.

Speedy Hire Plc (LSE:SDY) has released its interim results for the first half of FY2026, emphasising meaningful strategic progress in the face of subdued market conditions. A landmark commercial partnership with ProService is expected to drive notable revenue and earnings growth, marking a significant step in the company’s transformation efforts. Although the broader market remained soft, Speedy Hire continued to win market share through long-term contract awards and initiatives such as its Velocity growth strategy. Revenue edged up slightly during the period, but higher interest expenses and lower hire activity resulted in a pre-tax loss. Even so, management remains confident in the company’s growth trajectory, supported by recent partnership wins and strategically aligned contracts.

The company’s outlook remains constrained by profitability pressures and challenges around cash flow. While technical indicators offer some encouragement, elevated leverage and a negative P/E ratio point to continued financial risk. A strong dividend yield adds some appeal but does not fully counterbalance the underlying concerns.

More about Speedy Hire

Speedy Hire Plc is a leading provider of tools, specialist equipment, and support services across the UK and Ireland, with a strong focus on infrastructure, construction, and expanding services-led revenue streams.

Mobico Group PLC (LSE:MCG) reported a 5.4% rise in year-to-date revenue, supported by continued expansion in its ALSA division and targeted strategic initiatives, even as the UK market remained challenging and WeDriveU revenue declined. The company is rolling out a substantial cost-reduction programme and evaluating options to monetise assets within its UK Bus operation to reinforce its financial footing. Mobico expects to meet its adjusted operating-profit guidance for 2025, though results are likely to come in at the lower end of the range due to competitive headwinds and softer passenger volumes in select segments.

The group’s broader outlook remains hindered by ongoing financial strain, including persistent net losses and elevated leverage. Technical indicators point to bearish sentiment, adding pressure to an already difficult valuation backdrop characterised by negative earnings and the absence of a dividend. Although the latest earnings discussion highlighted pockets of revenue progress, significant operational and financial hurdles continue to shape near-term prospects.

More about Mobico Group

Mobico Group PLC is a global shared-mobility operator providing bus, coach, and rail services across the UK, North America, continental Europe, North Africa, and the Middle East.

Avation PLC (LSE:AVAP), a global lessor of commercial passenger aircraft, shared an encouraging outlook at its Annual General Meeting in Singapore. Management reported steady market valuations for new aircraft and rising lease rates, with the Asia-Pacific region continuing to serve as a major revenue driver. The company’s fleet currently includes 32 aircraft leased to 15 airlines across 14 countries, and it plans to expand further with additional ATR 72-600 deliveries. Avation also noted progress in strengthening its balance sheet, having refinanced unsecured notes and reduced secured bank borrowings — steps that supported an increase in its dividend. Demand for air travel and positive industry fundamentals underpin the company’s optimistic view of future growth.

Despite the constructive operational message, Avation’s financial profile remains challenged. High leverage and ongoing losses weigh on performance, while technical indicators point to continued bearish momentum. Valuation metrics add further pressure, with a negative P/E ratio and modest dividend yield contributing to a weak overall outlook.

More about Avation

Avation PLC is a Singapore-based aircraft leasing firm that provides commercial passenger aircraft to airlines around the world.

Spectra Systems Corporation (LSE:SPSY) has secured a five-year agreement to provide maintenance services for both current and next-generation sensors, a deal expected to generate roughly $6.7 million in service revenue between 2026 and 2030. The announcement follows a $5.69 million payment tied to the initial production batch of new sensors, underscoring Spectra’s strengthening market position and its continued focus on technological innovation and customer confidence.

The company’s outlook remains anchored by strong financial performance, marked by steady growth and disciplined management. Even so, near-term caution is warranted as technical indicators point to bearish momentum. Despite this, the stock’s low P/E ratio and high dividend yield enhance its valuation appeal, provided investors account for prevailing market trends.

More about Spectra Systems

Spectra Systems Corporation develops high-speed, machine-readable authentication technologies used in banknote security, security printing, brand protection, and gaming security software.

Arrow Exploration Corp. (LSE:AXL) has reported a successful outcome from the Mateguafa 6 well, drilled on the Tapir Block in Colombia’s Llanos Basin. The well intersected several hydrocarbon-bearing zones and has begun producing at a controlled rate, with the company planning to evaluate additional formations in upcoming wells. The result further underscores the importance of the Mateguafa Attic discovery, signalling the potential for an expanded core development area and increased reserves. Arrow has also named Hannam & Partners as a Joint Corporate Broker, reflecting continued strategic progression.

More about Arrow Exploration Corp

Arrow Exploration Corp. operates in Colombia through its subsidiary Carrao Energy S.A., with a focus on growing oil production across the Llanos, Middle Magdalena Valley, and Putumayo basins. The company maintains high working interests in its assets, benefits from Brent-linked light oil pricing and comparatively low royalty rates, and aims to deliver strong operating margins. Arrow is dual-listed on the AIM market of the London Stock Exchange and the TSX Venture Exchange.

Seeing Machines Limited (LSE:SEE) has unveiled two significant business wins, including a new program with an existing European Tier 1 partner and a fresh contract with Mitsubishi Electric Mobility Corporation (MELMB) in Japan. The European engagement, initially valued at US$10 million, will integrate the company’s Driver Monitoring System to support enhanced semi-automation features, with production slated for 2028–2031. The agreement with MELMB — worth US$1.6 million — marks Seeing Machines’ first partnership with the Japanese group, further advancing its strategic expansion efforts in Japan. Collectively, these deals contribute to a cumulative initial lifetime value exceeding US$400 million across all automotive programs, with meaningful revenue uplift expected from 2028 onward. The company also plans to build on current relationships to help OEMs meet forthcoming EU rules on advanced distraction-warning technology.

Seeing Machines’ outlook benefits from strong technical momentum and promising long-term growth drivers referenced in recent commentary. Even so, financial underperformance and challenging valuation metrics continue to weigh on sentiment. Overbought technical conditions and negative profitability indicators further constrain the near-term view.

More about Seeing Machines

Founded in 2000 and headquartered in Australia, Seeing Machines Limited is a global leader in vision-based operator-monitoring technology. The company develops AI-driven systems used to enhance safety across Automotive, Commercial Fleet, Off-road, and Aviation sectors. Its solutions combine advanced algorithms, embedded processing, and optical components to deliver real-time driver and operator insights. Seeing Machines maintains offices in Australia, the United States, Europe, and Asia.