European Markets Pause as Traders Await Fed’s Policy Decision

LONDON, Oct. 29, 2025 — European shares were largely unchanged on Wednesday, with investors taking a cautious stance ahead of the U.S. Federal Reserve’s highly anticipated interest rate decision later in the day.

The pan-European STOXX 600 index remained flat at 575.66 points (as of 0812 GMT), as market participants weighed a combination of upbeat corporate earnings and global economic uncertainties.

Market sentiment was steady, with most investors expecting the Federal Reserve to announce a quarter-percentage-point rate cut, its first since the summer, as policymakers seek to balance slowing inflation with weakening consumer demand. Traders are watching closely for Fed Chair Jerome Powell’s comments for hints on the pace of future cuts.

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Sector Performance: Miners Lead Gains, Telecom and Utilities Slide

Among the major European sectors, mining stocks rallied 1.7%, benefiting from stronger commodity prices and optimism over potential Chinese stimulus measures. The healthcare sector added 0.4%, supported by steady defensive buying.

On the downside, telecom shares fell 1%, while utilities lost 0.6%, reflecting investor rotation away from traditional safe havens as rate cut expectations increased.

The session also comes amid renewed geopolitical focus, with U.S. President Donald Trump set to meet Chinese President Xi Jinping in South Korea on Thursday, a development investors hope could ease lingering trade and technology tensions.

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Corporate Earnings Drive Stock-Specific Moves

Corporate results were in the spotlight across Europe, with several major firms posting better-than-expected earnings:

• Mercedes-Benz (MBGn.DE) shares surged 6.4% after the German automaker reported stronger-than-expected profit margins in its core automotive division, defying pressure from slowing Chinese demand.
• UBS (UBSG.S) climbed 1.6% following a 74% year-on-year surge in third-quarter net profit, well above market forecasts.
• Deutsche Bank (DBKGn.DE) gained 2.6% after posting a 7% increase in Q3 profits, beating analysts’ expectations and signaling strength in its investment banking arm.
• On the downside, Equinor (EQNR.OL) slipped 1.2% after the Norwegian energy giant reported a larger-than-expected decline in quarterly profit, hit by weaker gas prices and production disruptions.

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U.S. Tech Giants in Focus

Global investors also kept an eye on the “Magnificent Seven” U.S. tech giants — Microsoft (MSFT.O), Alphabet (GOOGL.O), and Meta Platforms (META.O) — all set to report quarterly results later on Wednesday.

With valuations near record highs, analysts say these tech titans face high expectations to deliver strong earnings growth to justify their premium pricing. Disappointing results could trigger a global tech sell-off, affecting sentiment across both U.S. and European markets.

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Outlook: Markets in Holding Pattern Before Fed Guidance

As the trading day progressed, analysts described market movements as “subdued but cautious,” with investors awaiting confirmation of the Fed’s rate trajectory and Powell’s economic outlook.

“The Fed’s message will set the tone for global markets heading into November,” said one Frankfurt-based strategist. “If Powell signals a slower pace of cuts, we may see renewed volatility in bond yields and equities.”

With the European Central Bank also signaling it will stay data-dependent, markets remain sensitive to incoming inflation reports and corporate performance trends.

For now, European equities remain in a holding pattern — steady, but poised for movement depending on what the Federal Reserve and U.S. tech earnings deliver next.