European Stocks Set for Lower Open

European stocks edged higher on Wednesday, with the STOXX 50 and STOXX 600 both gaining 0.1%, after advancing roughly 1% and 0.4%, respectively, over the previous two sessions to reach record highs. Investors paused to assess recent gains while awaiting further details on the US-Iran agreement to reopen the Strait of Hormuz. Market participants were also focused on the Fed’s monetary policy decision later in the day. ASML Holding rose 1.5%, Schneider Electric gained 1.3%, and UniCredit added 1%. Leonardo advanced 1% after the Italian government granted conditional approval for the company's joint venture with Baykar. The auto sector was among the weakest performers. BMW shares fell more than 6% after the carmaker cut its guidance, citing worsening conditions in the Chinese market and the broader impact of the Middle East conflict. Energy stocks also declined as oil prices extended their losses for a fifth session, with Shell down 1.3%, TotalEnergies shedding 0.7%, and BP falling 1.5%.

European equity markets were poised for a weaker open on Wednesday as investors awaited further details on the US-Iran peace agreement while remaining cautious ahead of the Federal Reserve’s policy decision. The interim accord is scheduled to be signed in Switzerland on Friday and could unlock billions of dollars in frozen Iranian assets while allowing Tehran to immediately resume oil exports. Meanwhile, the Federal Reserve is widely expected to leave interest rates unchanged, with market participants closely watching the policy statement and updated economic projections for signals on the future path of monetary policy. In Europe, attention will also turn to UK inflation data ahead of this week's Bank of England meeting, where policymakers are broadly expected to keep rates unchanged. In premarket trading, futures linked to the Euro Stoxx 50 and Stoxx 600 were both lower by around 0.1%.

European stock indices closed higher to extend their records on Tuesday amid confidence over an imminent deal between the US and Iran. The Euro STOXX 50 added 0.4% to 6,255 and the STOXX Europe 600 rose 0.2% to 636. Energy prices retreated further after Iran and the US maintained their plan to sign a memorandum of understanding on Friday, which US authorities claimed will restore tanker flows through the Strait of Hormuz. Banking stocks rose as bond yields dropped and improved credit conditions, with BBVA and Intesa Sanpaolo adding more than 2%. Meanwhile, UniCredit jumped 4% after the German government rejected its bid for Commerzbank. Industrials were also sharply higher with Safran and Schneider adding 2.5%.