European Stocks Fall in September & Q3

European equities ended September under pressure on Wednesday, as elevated global bond yields and persistent inflation concerns weighed on investor sentiment ahead of the final quarter. The STOXX 50 declined 0.8%, while the broader STOXX 600 fell 0.4%, with most sectors ending in negative territory. Banks weakened by around 0.5%, while energy and food & beverage stocks were among the biggest decliners, each losing 1.4%. Technology stocks bucked the broader trend, rising 2.5% to reach their highest level in a month and leading sector gains. The monthly performance was weaker overall, with both the STOXX 50 and STOXX 600 down more than 2% in September. For the STOXX 600, the decline ended a five-month run of monthly gains. Over the third quarter, both benchmarks fell 1%, marking a challenging period for European equities.

European stocks traded higher on Wednesday, with the STOXX 50 up 0.5% at three-week highs and the STOXX 600 gaining 0.7%, as most sectors advanced. Utilities and mining stocks led the gains, while the energy sector fell into negative territory. ASML (0.8%), Novartis (1.1%), Airbus (1.3%) and Safran (1.2%) all gained, while TotalEnergies shares fell 1%. Despite Wednesday’s gains on the final trading day of September, the STOXX 50 is down 1.5% for the month, while the STOXX 600 has fallen 2%, the first decline in six months. Energy prices have risen again this month amid a lack of progress in negotiations between the US and Iran, adding to inflationary pressures and reinforcing expectations of tighter monetary policy. Considering Q3, the STOXX 50 is little changed while the STOXX 600 is down 0.6%.

European equity markets were poised for a stronger open on Wednesday as falling oil prices and stabilizing bond yields improved investor sentiment. Oil prices were down so far this week after Saudi Arabia restored around half the capacity of its East-West pipeline, while the Trump administration ordered another release of emergency reserves. Global bond yields had climbed to multi-year highs as elevated energy costs raised concerns over renewed inflation, although the bond selloff showed signs of easing. In Europe, investors will assess inflation data from Germany, France and Italy, along with UK GDP and German unemployment figures. In corporate news, Glencore received approval with Yancoal Australia for a major expansion of their jointly owned coal mines in the Hunter Valley region of eastern Australia. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both up around 0.6%.