European Stocks Rise to Fresh Records

European stock indices rose for a fifth session to new records on Wednesday with further support from softer pro-inflationary risks. The Euro STOXX 50 rose by 0.6% to 6,297 and the STOXX Europe 600 rose 0.5% to 639. Sovereign yields fell further as Iran and the US maintained their intent to sign an agreement that restores energy trade from the Middle East this Friday. Energy prices pulled back and scaled down expectations that the ECB would be forced to raise interest rates this year. Banks led the gains for another session amid the improved credit outlook, with Santander, UniCredit, and Deutsche Bank gaining 2.5%. On the other hand, 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.

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%.