Solid Gold Berjangka – European stock markets traded without a clear direction on Wednesday (Oct 28), as investors adopted a cautious stance ahead of the Federal Reserve’s interest rate decision and earnings reports from major U.S. technology companies. The STOXX 600 index edged down 0.1%, while Germany’s DAX, France’s CAC 40, and Italy’s FTSE MIB remained relatively flat.
Greater pressure was observed in several key markets, with the UK’s FTSE 100 falling 0.2% and Spain’s IBEX 35 weakening by approximately 1%. This investor caution reflects a reluctance to open new positions before the Fed announces its policy decision and before Alphabet and Microsoft release their financial results following the close of Wall Street.
Performance in the banking sector helped limit further declines. BNP Paribas rose about 1% after reporting third-quarter profits that beat expectations, while Standard Chartered surged 4.4%, bolstered by strong trading revenue and inflows into its wealth management business. UBS also posted a third-quarter net profit of US$2.69 billion, an 8% year-on-year increase.
Regarding monetary policy, the Fed is expected to keep interest rates in the 3.75%–4.00% range. However, the market is pricing in an approximately 80% chance of a 25-basis-point hike in December, driven by high oil prices and resilient U.S. economic data. Comments from the Fed will be closely watched for insights into the central bank’s tolerance for inflationary pressures.
Beyond the Fed, the market is also awaiting reports from Alphabet and Microsoft, which will serve as a crucial test for valuations in the technology sector and the outlook for AI investments. Disappointing results—particularly concerning cloud monetization or data center spending—could weigh on European tech stocks such as ASML, ASM International, and BE Semiconductor, all of which are sensitive to global trends in infrastructure spending. (srh)