European stocks drop as Powell signals a larger interest rate hike

European stocks fell on Wednesday after Federal Reserve Chairman Jerome Powell said there was a possibility of more sharp interest rate increases, while sportswear company Adidas fell after announcing plans to cut its annual dividend.

The pan-European Stoxx 600 index fell 0.3 percent by 0805 GMT, hitting its lowest level in a week.

The index posted its biggest daily drop in nearly two weeks on Tuesday after Powell said at a hearing before the Senate Banking Committee that the central bank may need to raise interest rates more than expected and that it is ready to take greater steps to control inflation.

Adidas shares fell nearly 2 percent after the German sportswear maker said it plans to cut its annual dividend to 0.70 euros ($0.7374) per share.

Symrise shares fell 4 percent, dragging down the European chemicals sector after the German flavor and fragrance maker forecast a profit margin for 2023 that was slightly lower than market expectations due to higher costs.