European stocks steady as weak German data offsets Fed rate-cut hopes

European stock markets were broadly unchanged on Tuesday, as lingering concerns over weak regional growth offset rising expectations of a potential U.S. Federal Reserve rate cut next month.

By 03:02 ET (08:02 GMT), Germany’s DAX was up 0.1%, France’s CAC 40 gained 0.2% and the U.K.’s FTSE 100 added 0.1%.

Germany’s statistics office confirmed that the eurozone’s largest economy stagnated in the third quarter of 2025 compared with the previous quarter, underlining the fragile nature of the recovery. In addition, November’s Ifo business climate survey, released on Monday, showed that companies have pared back earlier optimism, pointing to a challenging final quarter of the year. Analysts at ING described the combination of a still-weak current assessment and fading expectations as evidence of an economy “deeply stuck in stagnation.”

In the autos sector, new car registrations in Europe rose 4.9% in October, with sales of electric vehicles outpacing petrol and diesel models, according to data from the European Automobile Manufacturers’ Association. However, the ACEA noted that overall volumes remain well below pre-pandemic levels and that, while battery-electric vehicles have reached a 16.4% market share year-to-date, this is still behind the pace needed for the transition.

Investors also kept a close eye on U.S. monetary policy signals. Federal Reserve Governor Christopher Waller reiterated that ongoing labor market weakness could justify another quarter-point rate cut in December, echoing comments from New York Fed President John Williams last week. This has fueled expectations of near-term easing, with traders now pricing in around an 81% probability of a December cut, up from about 42% a week earlier, according to CME’s FedWatch tool.

A raft of U.S. data is due later in the session, including September retail sales and producer price inflation. However, the scarcity of recent economic releases following the prolonged federal government shutdown continues to complicate efforts to accurately gauge the near-term path for interest rates.