European equities edged higher on Wednesday, rebounding from sharp declines earlier in the week as investors regained some confidence following easing trade tensions and dovish signals from the U.S. Federal Reserve.
At 03:10 ET (07:10 GMT), the DAX in Germany rose 0.2%, the CAC 40 in France surged 2.3%, and the FTSE 100 in the U.K. added 0.1%. The rebound came after regional indices hit two-week lows on Tuesday amid renewed fears of a U.S.–China trade conflict.
Tensions escalated last week when President Donald Trump threatened new tariff hikes on Chinese goods following Beijing’s move to impose export controls on rare earth minerals. Trump’s latest remarks on potentially curbing cooking-oil trade ties with China — after its reduction in soybean imports — further rattled global markets.
However, risk sentiment improved as traders bet that central banks could step in to support growth.
French Market in Focus as Political Tensions Rise
The French market led regional gains after Prime Minister Sebastien Lecornu pledged to suspend a controversial pension reform until after the 2027 presidential election. The decision followed intense pressure from left-wing lawmakers and is seen as an attempt to stabilize France’s fragile political landscape.
France has been navigating its deepest political divide in decades, with minority governments struggling to push deficit-cutting budgets through a fractured parliament split across ideological lines.
Adding to the mix, Federal Reserve Chair Jerome Powell signaled that while the U.S. economy remains resilient, a softer labor market could justify another rate cut later this year. His remarks offered global markets a sense of relief, supporting equities worldwide.
Key takeaways for investors:
- CAC 40 jumps 2.3% after political stabilization in France.
- Fed comments raise expectations of further U.S. rate cuts.
- Eurozone inflation remains subdued, aiding sentiment.
In macro data, France’s inflation held steady, with consumer prices rising 1.1% year-on-year in September, according to INSEE, matching preliminary readings.
Corporate Moves and Commodity Weakness
In corporate updates, ASML Holding (AS:ASML) warned of a sharp decline in China sales by 2026, despite stronger-than-expected quarterly bookings. The Dutch chip equipment maker cited tightening export curbs and slower demand growth as key risks.
Elsewhere, Entain (LON:ENT) reported a 6% rise in Q3 net gaming revenue, fueled by online growth, while PageGroup (LON:PAGE) posted weaker quarterly profit due to sluggish hiring in Europe.
Meanwhile, oil prices extended their slide after the International Energy Agency (IEA) forecasted a 2026 global surplus of 4 million barrels per day.
- Brent crude slipped 0.3% to $62.20 per barrel.
- WTI crude dipped 0.2% to $58.57 per barrel, both marking five-month lows.
The combination of steady European recovery, French political developments, and falling energy prices kept markets cautious but broadly positive midweek.