European Stock Markets Steady as ASML Earnings and Fed Meeting Take Centre Stage

European stock markets remained stable on Wednesday as investors analysed key corporate earnings while awaiting the outcome of the latest Federal Reserve policy meeting.

European Markets Hold Steady Ahead of ECB Decision

After a volatile start to the week, European equities stabilised on Wednesday, with traders closely monitoring Thursday’s European Central Bank (ECB) meeting. The ECB is widely expected to cut interest rates by 25 basis points, marking the fifth reduction since last year in response to sluggish economic growth.

German Consumer Sentiment Declines

Fresh economic data revealed a decline in German consumer sentiment heading into February. The consumer sentiment index, compiled by GfK and the Nuremberg Institute for Market Decisions, fell unexpectedly to -22.4 points from a revised -21.4 in the previous month. The drop reflects growing pessimism among households regarding the economic outlook.

Federal Reserve Expected to Hold Rates Steady

Later on Wednesday, the US Federal Reserve will conclude its two-day policy meeting. Analysts widely anticipate that interest rates will remain unchanged, as inflation continues to hover above the Fed’s 2% medium-term target. This meeting follows President Donald Trump’s virtual address at the World Economic Forum in Davos, where he called for immediate rate cuts to stimulate growth.

ASML Shares Surge on Strong Earnings Report

Investor sentiment received a boost on Wednesday following robust earnings from Dutch semiconductor giant ASML. The company’s stock soared 10% after reporting stronger-than-expected demand for its cutting-edge chip-making equipment in Q4. This comes despite concerns over AI spending after the successful debut of Chinese startup DeepSeek’s R1 reasoning model, which disrupted the global tech sector earlier in the week.

With key economic decisions looming and corporate earnings driving market movements, investors remain cautious yet optimistic about the near-term outlook for European equities.

(Sources: investing.com, reuters.com, ChatGPT)