FRANKFURT: European stocks slipped on Wednesday as commodity and defence rallies faced resistance from heavyweight healthcare and luxury names, with investors parsing fresh signals from Federal Reserve Chair Jerome Powell. The pan-European STOXX 600 closed 0.2 percent lower, while regional bourses were mixed. The French benchmark led losses, down 0.6 percent. The basic resource sector jumped 1.8 percent as copper prices rose to a 15-month high, while crude prices hit a three-week high, pushing the energy sector up 1.5 percent.
Anglo American surged 4.7 percent after Endiama bid for a minority stake in the miner’s diamond unit De Beers.
Defence stocks, including Rheinmetall, Hensoldt and SAAB, rose between 3 percent and 8 percent after US President Donald Trump said he believed Ukraine could retake all its land occupied by Russia and that Kyiv should act now.
Losses in heavyweight luxury stocks such as LVMH, Hermes, Richemont and EssilorLuxottica kept STOXX 600 gains in check. The subindex for luxury stocks dropped 1.5 percent.
Meanwhile, healthcare stocks slipped 0.6 percent, with heavyweights AstraZeneca and Roche down 2 percent and 0.4 percent respectively.
Automobile stocks pared losses and closed 0.6 percent lower after Bloomberg News reported that Washington formalized lower auto tariffs, effective August 1.
Wall Street stocks also stumbled as investors combed through Powell’s latest remarks, which offered little clarity on the Fed’s path ahead for interest rates.
Traders are betting on at least one more rate cut this year, with odds of an October move topping 94 percent, according to the CME FedWatch Tool.
The Fed’s first rate cut of 2025 last week lit a fire under global assets, lifting European and US equities. But after a strong start to the year — fueled by gains in defense stocks — European shares have lost momentum, trailing their US peers amid a relentless artificial-intelligence-driven rally that has pushed American benchmarks to record highs.
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