European stocks open lower

European equities declined on Wednesday, with the Stoxx 50 down 0.4 percent and the Stoxx 600 off 0.3 percent, led lower by defense and aerospace names.

The Stoxx Europe Aerospace & Defense index fell another 0.9 percent after a 2.6 percent slide on Tuesday, as optimism over progress in Ukraine peace efforts weighed on the sector. Germany’s Rheinmetall and Hensoldt slipped nearly 2 percent each, while UK-based Rolls-Royce and Qinetiq also lost close to 2 percent.

The declines followed remarks from US President Donald Trump, who urged both Vladimir Putin and Volodymyr Zelenskiy to show “flexibility” and prepare for a bilateral summit, raising speculation of a potential breakthrough in negotiations.

Beyond defense stocks, the broader market tone was subdued. UK inflation surprised to the upside at 3.8 percent in July, complicating the Bank of England’s task of balancing growth resilience with persistent price pressures. The stronger reading offered temporary support for sterling but highlighted risks of sticky inflation across Europe.

Globally, markets paused following a record-breaking rally since April. A sharp selloff in heavyweight US technology shares fueled concerns that valuations had run too far ahead of fundamentals, sparking a wave of caution across global equity markets.

The pullback spilled over into Europe, where investors scaled back positions in growth-sensitive sectors.

Attention now turns to the annual Jackson Hole Symposium, where Federal Reserve Chair Jerome Powell is scheduled to speak on Friday. His remarks are expected to provide crucial guidance on the Fed’s rate outlook after recent US inflation and labor market data reinforced expectations of a September cut. The speech will likely set the tone not only for US monetary policy but also for global risk sentiment, with ripple effects across European equity markets.