European Stocks Trade Mixed as U.S.-China Trade Talks and Fed Policy Meeting Take Center Stage

European equity markets opened Wednesday on a mixed note, with investor sentiment supported by renewed hopes of U.S.-China trade negotiations while caution prevailed ahead of the Federal Reserve’s highly anticipated policy decision.

At 03:05 ET (07:05 GMT), Germany’s DAX inched up 0.1%, buoyed by optimism surrounding global trade discussions. However, France’s CAC 40 slipped 0.3%, and the U.K.’s FTSE 100 edged 0.2% lower as investors weighed corporate earnings and broader geopolitical risks. London’s equity benchmark had returned from a public holiday, where it last set a new record for its longest daily winning streak.

U.S.-China Trade Talks Offer Glimmer of Relief

Global markets welcomed the announcement that U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are scheduled to meet with Chinese economic officials in Switzerland later this week. The meeting represents the first official step toward breaking the deadlock in a trade war that has shaken markets and raised recession fears.

The talks follow weeks of rising protectionism, with President Donald Trump imposing sweeping reciprocal tariffs on major trading partners, including China. While the announcement of the meeting signals mutual willingness to engage, Trump has emphasized he is in “no rush” to sign new trade deals.

Adding to investor optimism, China’s central bank—the People’s Bank of China—said on Wednesday it would lower bank reserve requirements and inject fresh liquidity into its financial system to cushion the economic blow from ongoing trade disruptions.

Fed Policy Decision Looms

The Federal Reserve concludes its two-day meeting on Wednesday, with markets widely expecting interest rates to remain unchanged. However, investor focus will shift to Fed Chair Jerome Powell’s post-meeting remarks for insight into how the central bank is interpreting rising tariff-related risks and whether this will influence the monetary policy trajectory in the second half of the year.

Geopolitical Risks and European Economic Data

In addition to the Fed, rising tensions between India and Pakistan have added another layer of uncertainty for global investors. Meanwhile, in the eurozone, attention turned to March retail sales data, as markets seek further evidence of consumer resilience across the bloc.

Earnings in Focus: Novo Nordisk, BMW, Siemens Healthineers

Corporate earnings remained in sharp focus on Wednesday, with several blue-chip names reporting results that reflected the growing impact of the global trade conflict.

• Novo Nordisk reported better-than-expected first-quarter net profit but lowered its full-year sales growth forecast due to weaker-than-anticipated demand for its flagship Wegovy weight-loss drug.
• BMW confirmed its 2025 outlook and projected some relief from recent tariffs on vehicle imports starting in July. The German automaker remains cautious, however, about broader trade policy developments.
• Siemens Healthineers posted a solid quarter with revenue up 6.8% and net income climbing 25%, but it widened its full-year earnings outlook citing pressures from global tariffs and supply chain challenges.
• Legrand, the French specialist in digital and electrical building infrastructure, forecasted that U.S. tariffs on Chinese goods would dent full-year earnings by between $150 million and $200 million.
• Orsted delivered better-than-expected first-quarter operating results, but the Danish renewable energy company announced the cancellation of its Hornsea 4 offshore wind project in the U.K., citing persistent challenges in the offshore wind industry.

With trade tensions, monetary policy uncertainty, and earnings headwinds all weighing on sentiment, European markets are likely to remain sensitive to global developments in the days ahead.