European shares fell on Wednesday on profit booking after a recent rally, while traders assessed corporate earnings and US-China trade talk developments ahead of the Federal Reserve’s rate decision later in the day.
The pan-European STOXX 600 index was down 0.3% as of 0857 GMT. Other regional indexes also traded lower.
Germany fell 0.1%, France declined 0.4%, Spain was down 0.5%, and the UK dropped 0.3%.
European retail stocks led sectoral losses with a 1.7% decline, while healthcare shares fell nearly 1%.
Meanwhile, US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official in Switzerland this weekend for talks that could be the first step towards resolving a trade war disrupting the global economy.
“Market had already priced that in because there’s been informal statements from both sides that although they did not officially confirm, they hinted at, initial discussions taking place,” said Andrea Cicione, head of research at TS Lombard.
“We’re coming off the back of a massive rally in the last couple of weeks, so what we’re seeing today is probably a bit of profit taking.”
Optimism around a potential de-escalation of trade tensions between the US and China has boosted markets in recent weeks.
Separately, German conservative leader Friedrich Merz was elected chancellor by parliament in a second round of voting after an unprecedented defeat on a first attempt got his coalition government off to a wobbly start.
European shares hold ground as investors assess earnings; focus on Fed, tariff updates
Mark Branson, the president of Germany’s bank watchdog BaFin, said that the nation’s financial firms were in a strong position but that uncertainty would remain extremely high.
Market focus will be on the Fed’s monetary policy meeting later in the day, with expectations for rate cuts being dialled down after relatively solid US labour data last week.
Among individual stocks, Novo Nordisk cut its sales forecasts for the first time since the launch of its Wegovy weight-loss drug four years ago, but its shares rose 6.4% ahead of a US FDA ban on copycat drugs later this month.
Hensoldt jumped 4.6% after the German defence company raised its revenue outlook for 2030 on increased defence spending.
Ambu slumped 12.6%, after the Danish medical equipment maker reported second-quarter sales and earnings below expectations.
Tomra tumbled 9.6% after the Norwegian provider of recycling and waste sorting solutions posted weaker-than-expected first-quarter earnings.
Sanofi fell 3.2% after US FDA appointed on Tuesday agency critic Vinay Prasad as its top vaccine official.
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