Two National Guard members shot near White House
Investing.com - European stocks closed higher on Tuesday, despite being weighed down by weak regional growth earlier in the session, as investors continued to monitor news regarding a possible Federal Reserve rate cut next month.
The DAX index in Germany climbed 1%, the CAC 40 in France gained 0.8% and the FTSE 100 in the U.K. also rose 0.8%.
German economy stagnated in Q3
The German economy stagnated in the third quarter of 2025 compared with the previous quarter, the statistics office said on Tuesday, confirming its preliminary reading.
Additionally, November’s Ifo data, released on Monday, showed that the country’s businesses have downscaled their previous optimism, suggesting a tricky final quarter of 2025.
“The combination of a still-weak current assessment component and reversed expectations is another example of an economy that remains deeply stuck in stagnation,” said analysts at ING, in a note.
New car sales in Europe rose 4.9% in October as electric cars outpaced petrol and diesel registrations, European Automobile Manufacturers’ Association data showed on Tuesday.
"Despite this recent positive momentum, overall volumes remain far below pre-pandemic levels," ACEA said. "The battery-electric car market share reached 16.4% year to date, yet it is still below the pace needed at this stage of the transition.”
U.S. economic data deluge
Elsewhere, investors remain focused on U.S. rate developments after Federal Reserve Governor Christopher Waller reiterated the labor market’s weakness could justify a further quarter-point rate cut in December.
His comments, added to similar views from his colleague John Williams last week, helped to raise investor expectations of a rate cut next month.
Traders are now pricing in an 81% chance of a cut next month versus 42% a week earlier, CME FedWatch showed.
An abundance of U.S. data was released on Tuesday, including retail sales and PPI for September, but the lack of current data, in the wake of the prolonged federal shutdown, underscores the challenge the market faces in pricing in near-term rates.
U.S. retail sales grew by less than expected in September, in a potential sign of caution among American consumers. Retail sales, which are not adjusted for inflation and mostly goods, rose 0.2% two months ago after an uptick of 0.6% in August, the Commerce Department’s Census Bureau said. Economists had anticipated a reading of 0.4%. On an annualized basis, sales increased 4.3%.
Meanwhile, the headline U.S. PPI for final demand for September was 0.3% month-on-month, versus a drop of 0.1% in August. Year-on-year, it stood at 2.7%, matching the prior month’s pace.
Underlying "core" PPI of 0.1% month-on-month and 2.6% year-over-year both undershot estimates.
EasyJet lifts holiday target
In the corporate sector, easyJet (LON:EZJ) reported better-than-expected full-year operating profit, as the British carrier upgraded its medium-term target for its holidays business after meeting the target early.
Compass Group (LON:CPG) forecast about 10% profit growth for fiscal 2026 after beating annual earnings estimates, as the world’s largest catering firm benefits from new business growth in the United States, its biggest market.
European home improvement retailer Kingfisher (LON:KGF) upgraded its full-year profit outlook as it reported a 0.9% rise in underlying sales for its third quarter, winning market share in the U.K.
Crude prices edge lower
Oil prices fell on Tuesday, weighed by the prospect of a U.S.-brokered peace deal between Russia and Ukraine, which could result in the return of Russian supply to the global market.
Brent futures dropped 1.7% to $61.68 a barrel, and U.S. West Texas Intermediate crude futures fell 1.8% to $57.84 a barrel.
Both crude benchmarks gained 1.3% during the previous session, but have been nursing steep losses in recent weeks amid growing fears of a looming supply glut and cooling global demand.