European Midday Briefing: European Stocks Fall as Investors Weigh Fed Chair, Trump's UN Comments

MARKET WRAPS

Stocks:

European shares were down on Wednesday following Fed Chair Powell's cautious tone on further rate cuts.

Investors now await Friday's PCE inflation data, as a softer reading could bolster the case for further monetary easing.

Meanwhile, European defense stocks surged in opening trade, leading the Stoxx 600 list of risers, after Trump said Tuesday evening that Kyiv could win back "all of Ukraine" and said Russia looks like a "paper tiger".

Investors were treating these remarks with caution due to a lack of progress in peace negotiations, ING said.

Market Insight

With the continuing pressures on the dollar, MFS IM saw the case for global diversification as strong as it has ever been.

Global asset classes--including non-U.S. equities, European fixed income and emerging-market debt--may stand to benefit, it said.

Stocks to Watch

Volkswagen has been conservative in its downgraded margin guidance, which is understandable given the uncertainty of EU-U.S. tariffs and the lower outlook at subsidiary Traton, HSBC said.

"Strong orders and the start of savings should underpin growth."

U.S. Markets:

Nasdaq-100 futures led gains among index futures.

A pledge from Alibaba to invest heavily in AI and cloud infrastructure is boosting AI optimism early Wednesday.

Meanwhile, Micron posted a bigger-than-expected jump in revenue, as AI developers turned to it for memory storage.

Its forecasts for this quarter also topped expectations.

Forex:

The euro extended its losses against the dollar after data showed German business confidence unexpectedly fell in September.

Trump's latest comments on the Russia-Ukraine war have raised the risk of the euro falling, ING said.

While his comments have had little impact on the euro, they posed downside risks for the single currency, it said.

The dollar rose after Powell's comments.

The currency appeared to be under significant pressure due to weaker U.S. growth prospects, policy risks and narrowing interest-rate differentials, MFS IM said.

"The only silver lining is that we do not believe that the dollar will lose its status as the primary reserve currency in the foreseeable future."

Bonds:

Eurozone government bond yields were lower, tracking moves in Treasurys following Fed Chair Powell's comments on Tuesday.

The 10-year Bund yield edged slightly lower after Germany's Ifo business climate index missed the consensus forecast in the Wall Street Journal's poll.

Morgan Stanley said t he 10-year BTP-Bund yield spread was expected to remain range-bound as long as fiscal deficits stay at around 3%.

Energy:

Risks of disruption to Russian supplies drove oil prices higher.

"Traders remain caught between geopolitical tensions and oversupply concerns, leaving oil little changed overall this month," MUFG said.

Metals:

Gold prices eased, weighed down by a firmer dollar.

"Growing expectations of deeper Fed rate cuts along with mounting geopolitical and economic uncertainty are fuelling this price rally," ANZ said.

Gold Chart

Comex gold futures were poised to test resistance at $3,800/oz, RHB Retail Research said, according to the daily chart.

Silver

Silver futures could rally to $46/oz, or even higher, by 2Q 2026, according to Commonwealth Bank of Australia.

Iron

Iron ore's recent price rally appeared overstretched, Citi Research said.

EMEA HEADLINES

TotalEnergies to Invest Around $5.3 Billion in French Wind Farm After Winning Tender

French energy major TotalEnergies said it was chosen alongside Germany's RWE to build and operate an offshore wind farm in France.

The project will represent investment of around 4.5 billion euros ($5.32 billion) for the design, building and operation the Centre Manche 2 site, marking the company's largest investment in France in 30 years, it said Wednesday.

JD Sports Fashion Posts Revenue Rise, Profit Dip In Line With Guidance

JD Sports Fashion posted an increase in revenue but a dip in profit for its fiscal first half, in line with recent company guidance.

The U.K. sneaker and fashion retailer said Wednesday that it booked revenue of 5.94 billion pounds ($8.03 billion) for the period ended Aug. 2, up 20% on year at constant currency.

GLOBAL NEWS

China to Stop Seeking Special WTO Treatment in Future Talks

China said it would no longer seek new special treatment for developing countries in current and future World Trade Organization negotiations, signaling a possible effort to ease a longstanding friction point with the U.S. ahead of a planned summit.

Chinese Premier Li Qiang announced the shift on Tuesday at a meeting of China's Global Development Initiative on the sidelines of the United Nations General Assembly in New York, according to state-run Xinhua News Agency.

Fed Officials Can't Agree On What's Worse: Inflation or Jobs

There may have only been one official dissent vote at the Federal Reserve's policy meeting last week, but recent comments from policymakers show there are wide and differing viewpoints on where the economy is heading and what potential pitfalls need to be prioritized.

The Federal Open Market Committee opted to lower interest rates by a quarter of a percentage point on Sept. 17, pushing the target fed funds range down to between 4% and 4.25%. Only newly minted Federal Reserve governor Stephen Miran dissented, contending that a half percentage point cut was warranted. On Monday, he noted that monetary policy was "very restrictive" and keeping it elevated risked "unnecessary layoffs and higher unemployment."

The Race Back to America for a Plane Full of H-1B Workers

When President Trump announced changes to the H-1B visa program Friday, it was the middle of the night in India and most of the eventual passengers of Air India Flight 179 were asleep. For many of them, the next day and a half would be a chaotic race around the world-and against the clock.

The administration said Friday evening that it planned to add a new $100,000 fee for H-1B visa applications-widely used by the tech industry and the primary pathway for foreign professionals to enter the country-beginning at 12:01 a.m. ET Sunday. Trump appeared with Commerce Secretary Howard Lutnick when announcing the move in the Oval Office. When asked if the policy would apply to existing visa holders, Lutnick appeared to say yes.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

September 24, 2025 05:15 ET (09:15 GMT)