European markets show mixed performance ahead of key U.S. Fed decision

Indices

Major European indices are currently demonstrating a combination of resilience and tactical consolidation, with several benchmarks hovering near record or multi-year highs. The FTSE MIB Index (FTSEMIB.MI) is trading at 43.38K, posting a modest decline but maintaining a STRONG_LONG micro-trend. This persistent upward momentum, especially in banking and energy sectors, signals robust institutional flows and continued buy interest in Italian equities. The DAX Performance Index (^GDAXI) stands at 24.15K, with a marginal decrease and a FLAT trend, indicating consolidation after recent advances and a pause among German blue chips.

In France, the CAC 40 (^FCHI) is quoted at 8.03K, posting a small pullback and holding a FLAT micro-trend, reflecting investor caution driven by political uncertainty. The FTSE 100 (^FTSE) trades at 9.66K, little changed on the session with a FLAT trend, suggesting a tactical pause as UK markets digest recent gains and await fiscal signals. Spain’s IBEX 35 (^IBEX) posts 16.73K, nearly unchanged but setting new record highs, underpinned by strong banking and basic resources performance, though the micro-trend is FLAT, indicating consolidation. The Euro STOXX 50 (^STOXX50E) stands at 5.72K, maintaining a STRONG_LONG signal, underlining ongoing bullish conviction in Eurozone blue chips. This constellation of trends suggests potential buy opportunities in the FTSE MIB and Euro STOXX 50, while the flat signals in other indices advocate for patience and selective positioning.

Stocks

Sector rotation remains a defining feature of today’s market action. Banking and basic resources are clear outperformers, with Spanish banks such as Sabadell (SABE.MC) and Caixabank (CABK.MC) delivering year-to-date returns of 67 and 47, further fueling the resilience of the IBEX 35. Steelmakers such as ArcelorMittal, Aperam, Thyssenkrupp, and SSAB have each advanced more than 3, buoyed by favorable regulatory changes in steel import quotas.

Conversely, the automotive and technology sectors are under pressure. BMW (BMW:GR) has dropped 8.9 after a weak earnings outlook, while ASML and ASM International continue to face challenges from renewed chip export restrictions. In France, Société Générale, Crédit Agricole, and BNP Paribas have reported declines, weighing on the CAC 40. On the upside, Inditex (ITX.MC) surged 7 after robust winter sales, propelling the IBEX 35 to fresh highs. This bifurcation in sector performance suggests opportunities in banking and basic resources, while caution is warranted in autos and tech.

Economic News

Recent macroeconomic data presents a mixed but generally constructive backdrop for European equities. Spain’s GDP growth slowed to 0.6 from 0.8, and year-over-year retail sales growth eased to 4.2 from 4.7, indicating some cooling in consumer demand. However, Eurozone consumer confidence improved by 0.7 to -14.2, surpassing expectations and supporting consumption-driven sectors. Inflation remains contained, with the Eurozone CPI at 2.1, reducing immediate pressure on the European Central Bank to tighten policy. The European Commission has revised its 2025 eurozone growth forecast up to 1.3 from 0.9, citing expected export strength.

Economic Events

The macroeconomic calendar is dense this week, with several high-impact events on the horizon. 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, the upcoming Producer Price Index, Consumer Confidence, and Retail Sales releases are especially relevant for IBEX 35 constituents. Central bank meetings, particularly the European Central Bank’s upcoming session and the U.S. Federal Reserve’s FOMC meeting, remain in sharp focus and could drive significant volatility in rate-sensitive sectors. The market is anticipating a 25 basis point rate cut from the Federal Reserve, with Chair Jerome Powell’s commentary likely to be a major driver for global risk assets in the coming days.

Market Sentiment

Market sentiment across Europe is best 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 underpinned by stable credit conditions and expectations of accommodative central bank policies. Outperformance in banking and basic resources is helping offset persistent weakness in autos and technology, encouraging a tactical, sector-rotational approach among investors. However, the prevalence of FLAT trends in several key indices signals a wait-and-see stance, as market participants remain vigilant ahead of major economic and policy announcements. This environment favors selective positioning and risk management while retaining an overall constructive view on leading benchmarks.

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