European stock indices edged down on Wednesday as investors processed a large batch of quarterly corporate results and positioned themselves ahead of the U.S. Federal Reserve's policy announcement.
At 03:02 ET (08:02 GMT), Germany's DAX was down 0.1%, France's CAC 40 slipped 0.5% and the U.K.'s FTSE 100 was trading largely unchanged.
Fed meeting prompts caution
Markets in Europe displayed a cautious stance ahead of the Federal Reserve's decision later in the day, even after strong gains in technology and AI-linked stocks helped lift the S&P 500 to record highs on Wall Street overnight. The U.S. central bank is widely expected to keep interest rates unchanged, and market participants signalled they will be listening closely to Chair Jerome Powell for any guidance on the timing of potential rate cuts later this year.
Two additional facts are drawing investor attention. Powell's term as Fed chair is due to end in May, and U.S. President Donald Trump said on Tuesday that he will announce his pick for the next head of the Federal Reserve soon. Trump has repeatedly urged Powell to cut rates more aggressively, arguing the Fed chief has been slow to ease policy - comments that have raised concerns about potential implications for the central bank's independence.
German consumer mood and ECB expectations
On the data front, German consumer sentiment appears to be showing signs of improvement. The forward-looking GfK consumer sentiment index rose to -24.1 points in February from -26.9 points in the prior month, beating expectations for a more modest uptick to -26.0 points.
Attention in Europe will shortly turn to the European Central Bank, which meets next week and is broadly expected to keep rates on hold at 2% for a fifth consecutive meeting as eurozone inflation remains subdued and the region's economy has proved more resilient than anticipated. Still, Austrian central bank governor Martin Kocher cautioned in an interview with the Financial Times that ECB policymakers may need to consider another interest rate cut if further gains in the euro begin to weigh on inflation.
The euro strengthened to a more-than-four-year high on Tuesday as the dollar weakened amid investor concerns about U.S. policy risks and geopolitical tensions.
Corporate results: ASML leads the charge
European earnings kicked into high gear, with several large companies releasing results that influenced market sentiment. Dutch chip-equipment maker ASML reported fourth-quarter results that beat forecasts, disclosed a jump in orders and provided upbeat guidance for 2026 - an update that market participants interpreted as evidence of sustained demand from manufacturers of advanced chips used in artificial intelligence.
In the automotive sector, Volvo reported a smaller-than-forecast drop in fourth-quarter operating profit, but the Swedish truckmaker trimmed its planned annual dividend by more than markets had expected.
Swiss contract drugmaker Lonza projected 2026 sales growth of 11%-12% in constant exchange rates, and said core EBITDA margins are expected to expand above 32%, signalling continued momentum despite adverse foreign exchange effects.
German chemicals producer Wacker Chemie delivered fourth-quarter earnings below expectations and announced a roughly
Late on Tuesday, luxury group LVMH surpassed fourth-quarter sales expectations, a development investors viewed as a potential sign of renewed strength in the luxury sector even as trade tensions, a softer dollar and elevated gold prices pressured margins.
On Wall Street, heavyweights Meta Platforms, Tesla and Microsoft were all scheduled to report quarterly results after markets closed, keeping attention on U.S. earnings flow in addition to the European announcements.
Energy markets and U.S. winter storm impact
Oil prices largely held recent gains amid market reaction to a severe winter storm in the United States. Brent futures eased 0.1% to $66.50 a barrel, while U.S. West Texas Intermediate crude rose 0.1% to $62.45 a barrel.
Both benchmarks had jumped about 3% on Tuesday after finishing last week at their highest levels since January 14. Estimates cited in market commentary suggested U.S. producers lost up to 2 million barrels per day - roughly 15% of national output - as the storm disrupted energy infrastructure and power grids.
Taken together, the mix of corporate earnings, central-bank focus and weather-related supply disruptions left investors balancing pockets of optimism with caution as markets awaited fresh policy signals from Washington.