European Stocks Edge Higher as Fed Decision Looms

European equities traded cautiously higher on Wednesday morning, as investors braced for the Federal Reserve’s policy announcement and Jerome Powell’s speech, which could set the tone for global markets.

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Key Market Moves

• STOXX 600: up 0.1% at 551.58, recovering from a one-week low.
• Sector Drivers:
  • Technology led gains, with SAP +4.1%, bouncing back on Jefferies’ optimistic note about cloud intake and cash flow.
  • Financials remained weak, pressured by rate sensitivity.
• Currency Effect: The euro has rallied over 10%, which analysts warn could shave about 4% off export-driven earnings.

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Corporate Highlights

• Nestlé: -0.4% after Chairman Paul Bulcke announced plans to step down, following recent CEO changes.
• Unilever (Ben & Jerry’s): Shares struggled after co-founder Jerry Greenfield quit amid a rift with the parent company.
• PostNL: +5% after unveiling its new Capital Markets Day strategy.

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Macro & Fed Focus

• The Fed is expected to cut rates by 25 bps later today, a move already priced in, driven by weakening U.S. labor market signals.
• Market attention will be on:
  • The dot plot projections.
  • Powell’s press conference for clues on whether this is the start of a longer easing cycle.