November 14, 2025 – European equities fell on Friday after hawkish signals from U.S. Federal Reserve officials dampened hopes for an imminent interest rate cut. Despite the decline, the pan-European benchmark was poised for its strongest weekly gain since late September.

STOXX 600 Index Retreats

The STOXX 600 dropped 0.9% to 575.41 points as of 0810 GMT. Banking stocks were among the hardest hit, with the sector down nearly 2%. Still, the benchmark recorded a weekly gain of 1.86%, marking its best performance in over two months.

Fed Policy Weighs on Market Sentiment

Investors had anticipated that the resumption of U.S. economic data would indicate a weakening economy, potentially prompting the Fed to lower borrowing costs in December. However, growing caution from Federal Reserve policymakers has tempered these expectations, leading to market volatility across European equities.

Bright Spots in Luxury and Industrial Sectors

Some sectors bucked the broader market trend:

• Richemont (CFR.S) surged 7.8% after quarterly sales exceeded forecasts.
• Siemens Energy (ENR1n.DE) jumped 10% after announcing plans to pay its first dividend in four years and raising its mid-term outlook, supported by strong demand for gas turbines, services, and power transmission technology.

UK Stocks Under Pressure

UK equities underperformed continental peers, dragged down by rising gilt yields. Investor sentiment was affected by reports that Finance Minister Rachel Reeves abandoned plans to raise income tax rates, creating uncertainty about how the government intends to manage public finances in the upcoming budget.