European stocks climb early as global investors focus on the Fed’s next policy decision

Indices

European equity markets are trading near record or multi-year highs, reflecting resilience and selective bullish momentum across the region’s major benchmarks. The FTSE MIB Index (FTSEMIB.MI) is currently at 43663.65, up modestly and sustaining a STRONG_LONG, signaling ongoing institutional inflows, especially into banking and energy. The DAX Performance Index (^GDAXI) stands at 24004.62, with a FLAT, indicating a phase of consolidation after strong prior gains. France’s CAC 40 (^FCHI) trades at 8133.14, also displaying a FLAT, reflecting investor caution amid political and economic uncertainties.

The FTSE 100 (^FTSE) is quoted at 9730.45 and remains in a FLAT, suggesting a tactical pause as markets digest recent gains. Spain’s IBEX 35 (^IBEX) is at 16834.7, establishing new highs, but with a FLAT, indicating a period of consolidation. The Euro STOXX 50 (^STOXX50E) prints 5738.15 and maintains a STRONG_LONG, underlining persistent bullish conviction in Eurozone blue chips. Technical signals continue to favor potential buy opportunities in the FTSE MIB and Euro STOXX 50, while the flat trends in other indices suggest a wait-and-see stance by investors.

Stocks

Sector rotation remains a defining theme. Banking and basic resources are outperforming, with Spanish banks such as Sabadell (SABE.MC) and Caixabank (CABK.MC) delivering year-to-date returns of 67 and 47, fueling IBEX 35 resilience. Steelmakers like ArcelorMittal, Aperam, Thyssenkrupp, and SSAB have each advanced over 3 on favorable regulatory changes to steel import quotas. Inditex (ITX.MC) surged 7 following robust winter sales, helping lift the IBEX 35.

In contrast, the automotive and technology sectors are under pressure, with BMW (BMW:GR) down 8.9 after a weak earnings outlook, and French banks Société Générale, Crédit Agricole, and BNP Paribas weighing on the CAC 40 due to recent declines. Companies like STMicroelectronics (STM) have led gains in the FTSE MIB, advancing over 3 following positive AI chip sector news.

Economic News

Recent macroeconomic data continues to shape a constructive yet nuanced backdrop. Eurozone inflation remains subdued at 2.1, in line with European Central Bank targets, reducing immediate pressure for policy tightening. Spain’s GDP growth rate has eased to 0.6, while retail sales have softened to 4.2, indicating persistent but slower expansion.

Sector-specific news is also impactful: the basic resources sector led gains with a 1.3% rise, driven by record-high copper prices, while industrials advanced for the fourth session, buoyed by upgrades for companies like Schneider Electric and Siemens Energy. Automakers benefited from proposed U.S. policy changes favoring gasoline vehicle sales. Conversely, Swiss Re (SRENH) shares fell 5.3 on disappointing 2026 targets.

Economic Events

The macroeconomic calendar is dense this week. Key data releases include Eurozone Industrial Production, GDP figures for both the region and Germany, Germany’s ZEW Economic Sentiment Index, and France’s Consumer Price Index. In Spain, upcoming data on the Producer Price Index, Consumer Confidence, and Retail Sales are closely watched for their potential impact on the IBEX 35. Central bank meetings from the European Central Bank and the U.S. Federal Reserve remain in focus and could drive volatility, particularly in rate-sensitive sectors. The U.S. Personal Consumption Expenditure (PCE) report is also highly anticipated, as it is expected to influence the Federal Reserve’s monetary policy decisions.

Market Sentiment

Market sentiment across Europe is described as cautiously optimistic. Sustained capital inflows into blue-chip indices such as the Euro STOXX 50 (^STOXX50E) and FTSE MIB Index (FTSEMIB.MI) are supported by expectations of accommodative central bank policies and stable credit conditions. Outperformance in banking and basic resources helps offset persistent weakness in autos and technology, fostering a tactical, sector-rotational approach among investors. The technical and macroeconomic backdrop remains supportive of further upside in leading benchmarks, though vigilance is warranted ahead of high-impact economic and policy announcements that could alter the risk landscape.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.