European equities registered modest advances on Wednesday as the region’s corporate reporting season remained the focal point for market participants ahead of important economic data on inflation.
By 03:02 ET (08:02 GMT), Germany’s DAX had risen 0.2%, France’s CAC 40 was up 0.4% and the U.K.’s FTSE 100 climbed 0.3%.
Earnings season and corporate developments
After a sharp sell-off in precious metals that began late last week eased, attention turned back to quarterly corporate results, with several senior European companies releasing figures and guidance this week.
UBS (SIX:UBSG) delivered a stronger-than-expected performance, reporting a 56% increase in net profit that outpaced forecasts. The Swiss bank, noted as the world’s largest wealth manager, cited robust contributions from its wealth management and investment banking divisions. UBS also confirmed plans to repurchase at least $3 billion of shares in 2026, matching the amount bought back in the prior year, and signalled an intention "to do more."
In pharmaceuticals, GSK (LON:GSK) presented its first outlook under new CEO Luke Miels, forecasting slower sales growth in 2026 as the company shifts strategic emphasis toward expanding its pipeline to address looming patent expiries for its leading HIV treatments. Novartis (SIX:NOVN) likewise provided guidance that pointed to pressure next year, forecasting a low single-digit percentage decline in operating profit for 2026, with competition from lower-cost copies of established medicines such as the heart drug Entresto weighing on results.
Spain’s Banco Santander (BME:SAN) posted a 12% rise in attributable profit for 2025, marking its fourth straight year of record results and reflecting resilient interest income and record fee generation. By contrast, France’s Credit Agricole (EPA:CAGR) reported that fourth-quarter net income fell 24%, a drop largely shaped by a significant first-consolidation charge related to its stake in Banco BPM, even as the bank recorded record annual revenues and proposed an increase to its dividend.
Across the Atlantic, investors were preparing for additional earnings to digest later in the day, with particular focus on Alphabet (NASDAQ:GOOGL), which is scheduled to report after U.S. markets close. Analysts expect Alphabet to report revenue rising by 15.5% to $111.37 billion. Market attention on the company will be concentrated on its spending plans for 2026, its outlook for cloud services demand and whether it provides updates on constraints to its AI capacity.
Economic calendar - eurozone inflation in focus
Beyond corporate news, traders awaited preliminary eurozone inflation data for January due later in the session, ahead of the European Central Bank’s rate decision the following day. Market expectations are for consumer prices in the bloc to have eased slightly to an annual rate of 1.7% in January, which would remain comfortably below the ECB’s 2% target.
The ECB is widely expected to hold its policy rate steady at 2% for a fifth consecutive meeting. However, the report notes that a significant miss in the inflation figure could raise concerns among policymakers, who last month flagged increasing worries about the euro’s rapid appreciation versus the dollar and its potential to push inflation even lower.
Oil gains on regional tensions
Crude oil prices moved higher on Wednesday as market participants reacted to incidents that raised the prospect of supply disruptions in the Middle East. Brent futures for April rose 0.1% to $67.40 a barrel, while West Texas Intermediate futures increased 0.2% to $63.38 a barrel. Both benchmarks had climbed nearly 2% on Tuesday.
Reports indicated that the U.S. shot down an Iranian drone approaching a U.S. aircraft carrier in the Arabian Sea, and that a group of Iranian gunboats were observed approaching a U.S.-flagged tanker in the Strait of Hormuz. Those events occurred just before scheduled talks between Washington and Tehran, casting doubt on whether the meetings will proceed as planned.
What to watch next
- Incoming corporate earnings across banking and pharmaceuticals, where forward guidance and profit revisions will likely influence sector trajectories.
- Eurozone preliminary inflation for January, which could affect ECB deliberations and market expectations for future policy moves.
- Geopolitical developments in the Middle East, which are being monitored for potential impacts on oil supply and energy prices.