European stocks slipped lower Wednesday, tracking overnight losses on Wall Street amid growing uncertainty over valuation levels as well as the future path of U.S. interest rates.
At 03:05 ET (07:05 GMT), the DAX index in Germany dropped 0.2%, the CAC 40 in France slipped 0.1% and the FTSE 100 in the U.K. fell 0.1%.
Sentiment wanes after Powell speech
Sentiment received a hit overnight with losses on Wall Street after U.S. Federal Reserve Chair Jerome Powell flagged increasing economic risks and uncertainty over interest rates.
Powell said, in a speech at Rhode Island’s Greater Providence Chamber of Commerce on Tuesday, said the central bank is in a "challenging situation" with an ongoing risk of faster-than-expected inflation at the same time that weak job growth has raised concern about the health of the labor market.
The Fed cut interest rates earlier this month for the first time this year, but Powell offered little indication of when he thinks the U.S. central bank might next ease monetary policy.
The Fed chair also said that “equity prices are fairly highly valued”, with the benchmark indices on Wall Street all hitting all-time highs recently.
While the benchmark S&P 500 index is up over 13% year-to-date in the U.S., the German DAX index is over 18% higher, suggesting the potential for a hefty selloff.
German Ifo survey due
Back in Europe, the flash PMIs for the eurozone, released on Tuesday, offered some good news, as business activity grew at its fastest pace in 16 months in September.
However, the survey also highlighted a stark difference between the bloc’s two biggest economies of Germany and France with the former - Europe’s largest - accelerating, while political woes kept the latter on the backfoot.
The German Ifo business climate is due later in the session, and is expected to confirm an improvement in sentiment.
JD Sports signals ongoing caution
In the corporate sector, JD Sports Fashion (LON:JD) posted a 13.5% drop in first-half profit, as weakness in its U.S. operations weighed on results. The U.K.-based retailer maintained its full-year outlook but signaled ongoing caution about the trading backdrop.
Ferrari (NYSE:RACE) lifted its EBITDA margin to 26.6% in the first half of 2025, up 20 basis points from a year earlier, as productivity gains offset higher costs from investments in staff and digital capabilities.
Crude helped by drop in U.S. inventories
Oil prices edged higher Wednesday as a fall in U.S. crude inventories diluted worries about a fall in demand in the world’s largest economy.
At 03:05 ET, Brent futures climbed 0.1% to $67.72 a barrel, and U.S. West Texas Intermediate crude futures rose 0.1% to $63.48 a barrel.
Both benchmarks climbed by more than $1 a barrel on Tuesday as a deal to resume exports from Iraq’s Kurdistan stalled, dampening worries about additional supply onto the global market.
Helping the tone was the news that crude stocks declined by 3.82 million barrels in the week ended September 19, while gasoline inventories fell by 1.05 million barrels, according to data from the American Petroleum Institute figures.
Official U.S. government energy data is due later on Wednesday.
Source :
https://www.investing.com/news/stock-market-news/european-stocks-fall-slightly-german-ifo-survey-due-4252448
