Financials lift European stocks to record levels on US shutdown relief

European shares hit a record high on Wednesday, boosted by financials as investors were relieved by a potential end to a historic U.S. government shutdown and weighed a series of mixed corporate updates.

The pan-European STOXX 600 index added 0.58% and was last at 583.56 points as of 0906 GMT, with UK’s FTSE 100 also notching a record high.

Investors globally were hopeful that the U.S. House of Representatives could soon vote to end a government shutdown that had halted economic data that is crucial for policymakers.

Although concerns linger over the impact it could have had on the world’s largest economy, expectations are that any signs of a weakening U.S. labour market could nudge the Federal Reserve to take a more dovish outlook on monetary policy.

“As official economic data resumes following the reopening of the government, we believe more evidence of a cooling labor market should clear the path for further Fed easing,” analysts at UBS Global Wealth Management said.

Banks, were the biggest boost to the STOXX index with ABN Amro rising 3.5% after the Dutch lender announced upbeat quarterly earnings and that it had acquired domestic commercial lender NIBC Bank to strengthen its position in its home market.

European financial stocks have outperformed the broader market on annual price returns, helped primarily by better-than-expected earnings. Banks-heavy bourses in Spain and Italy have starkly outperformed the region’s STOXX benchmark this year.

As of Tuesday, 53% of the STOXX 600 companies that have reported results that exceeded analyst estimates, according to data compiled by LSEG, compared with 73% in the financial sector.

On Wednesday, Britain’s SSE topped the STOXX index with an 11% gain after unveiling a 33 billion pound ($44.29 billion) five-year investment plan, as it seeks to upgrade the UK’s regulated electricity networks and its renewables business.

On the flip side, French voucher provider Edenred slid 9% and triggered a trading halt after cutting its 2026 profit guidance, citing forthcoming regulatory changes to the meal and food voucher system in Brazil.

German equities outperformed other major markets and hit a two-week high as investors cheered a batch of strong earnings.

Infineon gained 1.3% after the German chipmaker significantly raised its 2026 sales target for the AI power supply segment.

RWE reported higher-than-expected profit for the first nine months of the year, sending shares of Germany’s largest power producer up 3.5%.