European Stocks Cut Gains

European stocks closed firmly lower on Wednesday, pressured by another session of higher energy costs as markets await major central bank decisions in the incoming session. The Eurozone's STOXX 50 dropped 0.5% to 5,744 and the pan-European STOXX 600 fell 0.7% to 598. Tech shares led the losses after outperforming their peers at the start of the week, with SAP and Prosus losing 2.5% and 7.4%, respectively. Meanwhile, another jump in natural gas prices pressured utilities with Enel dropping more than 3%. In turn, UniCredit underperformed other banks as markets await news on Commerzbank's shareholders' call for the former's $40 billion acquisition offer. The Federal Reserve is expected to hold its rates unchanged overnight but the FOMC will update its economic projections. Meanwhile, the ECB, BoE, SNB, and Sveriges Riksbank are all expected to hold rates unchanged during tomorrow's session.

Both the STOXX 50 and the STOXX 600 were down 0.5% on Wednesday, erasing morning gains, as oil prices moved higher again after reports that Israel has bombed a natural gas infrastructure in Iran, stoking further concerns about the effects of the war in the economies. Utilities, tech and consumer non-cyclicals were the worst performing sectors while energy and industrials moved higher. Roche (-2.1%), Novartis (-1.5%), Novo Nordisk (-2.2%), Nestle (-3.7%), Unilever (-3.2%) were sharply lower and ASML Holding cut early gains to trade little changed. On the other hand, shares of Diploma jumped about 19% to top the STOXX 600 after the company raised its fiscal 2026 guidance.

European stocks rose on Wednesday, with the STOXX 50 gaining 0.9% and the STOXX 600 adding 0.4%, marking a third consecutive session of gains. Investors remained focused on key monetary policy decisions this week, including the Federal Reserve’s announcement later in the day. Meanwhile, renewed optimism around AI and a decline in oil prices helped lift market sentiment. Iraq reached a deal to resume exports via Turkey’s Ceyhan port, easing concerns over supply disruptions linked to the Iran war. The US also stepped up efforts to push for the reopening of the Strait of Hormuz. Also, Nvidia’s CEO highlighted a rapidly emerging AI project, OpenClaw, as a significant advancement in human interaction with AI. Tech, financials and industrials were the top performing sectors. ASML Holdings soared 2.5% and HSBC added 1.2%. Shares of Diploma jumped about 17% to top the STOXX 600 after the company raised its fiscal 2026 guidance.