European Stocks Poised for Lower Open to Begin 2026

Stocks in Europe closed higher on Thursday, with both the STOXX 50 adding 0.9% and the STOXX 600 rising 0.6%, as investors largely shrugged off developments in the Middle East and the ECB's latest policy decision. President Trump vowed additional strikes on Iran and threatened to target the country's energy infrastructure. Meanwhile, the ECB raised interest rates by 25bps while revising its inflation forecasts higher and lowering its growth projections. However, these moves had been broadly priced in by investors. The technology sector was among the top gainers, supported by a global rebound in semiconductor stocks following recent weakness in the industry. ASML gained 4.5%, Infineon Technologies advanced 2.6%, and STMicroelectronics jumped 5.8%. Luxury goods makers also traded higher, with LVMH rising 1.5%. Meanwhile, Hugo Boss surged more than 9% after its largest shareholder, Frasers Group, launched a $2 billion takeover bid for the fashion house.

Stocks in Europe traded higher on Thursday, with the STOXX 50 adding 0.7% and the STOXX 600 gaining 0.5%, as investors assessed the evolving situation in the Middle East and brace for the ECB's monetary policy decision. The US military announced that it had completed strikes in Iran, while Israel reported missile launches from Lebanon and Kuwait closed its airspace amid what it described as "Iranian aggression". Meanwhile, the ECB is widely expected to deliver its first rate hike since 2023 later in the morning. Tech stocks provided support as the semiconductor sector attempted to recover from recent losses. STMicroelectronics rose 2.7%, ASML Holding gained 2.6%, and Infineon advanced 1.2%. Meanwhile, Hugo Boss surged more than 6% after its largest shareholder, Frasers Group, launched a $2 billion takeover bid for the fashion house. On the other hand, Novo Nordisk (-1.2%), SAP (-4.8%) and BMW (-2.5%) were lower. Travel and leisure stocks were also among the biggest laggards.

European equity markets were on track for a weaker open on Thursday as investors remained cautious ahead of the European Central Bank’s policy decision. The ECB is widely expected to raise its benchmark interest rate by 25 basis points to 2.25% as policymakers seek to contain inflationary pressures fueled by soaring energy costs linked to the Middle East conflict. If delivered, it would mark the central bank’s first rate increase since September 2023. Meanwhile, the US and Iran exchanged attacks this week in a major breach of their ceasefire, although the US military said it has completed its latest strikes on Iran, raising hopes that peace negotiations could resume. In premarket trading, both Euro Stoxx 50 and Stoxx 600 futures were down about 0.5%.