European stocks mixed ahead of Fed rate decision; UBS reports profits surge

Investing.com - European stocks were mixed again on Wednesday, with traders digesting more corporate earnings ahead of a key policy decision by the Federal Reserve.

The DAX index in Germany declined 0.6% and the CAC 40 in France dropped 0.2%, while the FTSE 100 in the U.K. rose 0.6%. 

Fed set to announce easing  

The U.S. central bank concludes its two-day policy-setting meeting later in the session, and is widely expected to announce a cut to interest rates of 25 basis points to the 3.75%-4.00% range.

This easing is virtually baked in, with the market now pricing in a 96% chance of such a cut, according to the CME Fedwatch tool. 

As such, and with the U.S. government shutdown depriving both market participants and policymakers of vital economic knowledge, a lot of the focus will be on comments from Fed Chair Jerome Powell for insight into how the central bank perceives the economy and the likely path of monetary policy.

Also in focus will be whether the central bank finally announces an end to its long-running balance sheet reduction program, known as quantitative tightening.

Easing trade tensions 

Trade tensions between the U.S. and China, the two largest economies in the world, appear to be easing after U.S. President Donald Trump said he expects to lower his fentanyl-related trade tariffs against China as part of an upcoming meeting with President Xi Jinping this week. 

Trump’s comments came just a day before his meeting with Xi in South Korea on Thursday, where the two are expected to discuss a further deescalation in their ongoing trade conflict. 

Trump had imposed a 20% tariff on China earlier this year, accusing the country of facilitating illegal shipments of the synthetic opioid onto U.S. shores. 

The U.S. president also said he will discuss Nvidia (NASDAQ:NVDA) and its flagship artificial intelligence chip, Blackwell, during his upcoming meeting with his Chinese equivalent.

Earnings deluge 

Quarterly results from the important U.S. tech sector will also be in focus Wednesday, with numbers from Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) due after the close on Wall Street.

The bar is high for these tech giants to deliver solid numbers that would justify stretched valuations.

It is also a busy day for corporate Europe.

Swiss lender UBS (NYSE:UBS) said third-quarter net profit surged 74%, comfortably beating expectations as revenue shot higher on financial market volatility caused by global tariff turmoil as well as renewed M&A activity.

Deutsche Bank (ETR:DBKGn) reported a record third-quarter profit before tax, up 8 % from a year earlier, boosted by stronger trading revenue and cost discipline.

Spanish bank Santander (BME:SAN) reported a 7.8% year-on-year rise in its third-quarter net profit, saying a strong performance in its U.S. business offset lower lending income and some weakness in Brazil.

Mercedes Benz’s (ETR:MBGn) operating profit plunged by more than two-thirds in the third quarter, with the German auto giant hit by hefty redundancy payouts, as it faces intense competition in the U.S. and China.

Adidas’s (ETR:ADSGN) North America sales recorded the weakest growth among the German sportswear maker’s regions in the third quarter, the company reported.

Equinor (OL:EQNR) reported a bigger-than-expected decline of 9.9% in third-quarter profits on Wednesday as oil and gas prices fell from a year ago, but the Norwegian energy group maintained its outlook for production growth.

U.K. drugmaker GSK (LON:GSK) raised its 2025 sales expectations, helped by double-digit growth in the third-quarter in its specialty medicines, including HIV and oncology.

Crude prices helped by U.S. inventories 

Oil prices gained after recent losses following an unexpected draw in U.S. oil inventories, with trading ranges tight ahead of the conclusion of a Federal Reserve meeting. 

Brent futures rose 0.8% to $64.33 a barrel, and U.S. West Texas Intermediate crude futures traded 0.7% higher at $60.57 a barrel.

The crude market had suffered two straight days of losses following a report that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is considering increasing oil production in December.

Data from industry body American Petroleum Institute, released on Tuesday, showed U.S. crude inventories fell by just over 4 million barrels for the week ended October 24, while gasoline inventories dropped by 6.35 million barrels.

The larger-than-expected draws triggered a short-term price surge during the last trading session and supported the market early this morning.