European equities edged higher on Wednesday, buoyed by a more dovish tone from Federal Reserve Chair Jerome Powell, a tentative easing of political tensions in France, and signs of cooling inflation across key Eurozone economies. The combination of stabilising macro signals and upbeat corporate news helped lift regional indices after recent bouts of volatility.
Investor sentiment improved following Powell’s remarks, suggesting the US labor market was showing signs of softening, reinforcing expectations of a potential rate cut later this year. Markets interpreted it as a dovish signal amid weakening economic momentum.
In Europe, French and Spanish inflation data showed a decline. French CPI dropped 1.0% month-on-month in September, its steepest fall in a year, largely driven by seasonal declines in services. Spain’s CPI also fell 0.3%, while Eurozone industrial production contracted 1.2% in August, reviving speculation that the ECB may adopt a more dovish posture in the coming months.
On the political front, France’s reappointed Prime Minister Sebastien Lecornu pledged to delay controversial pension reforms until after the 2027 election, helping to calm domestic tensions after weeks of uncertainty, boosting equities.
Among corporates, LVMH surged over 13% after reporting a return to organic revenue growth in Q3 and committing to reinforcing its leadership in the luxury sector.
