European stocks rose on Wednesday morning after a string of strong corporate results a day earlier, while equities were also boosted by remarks from Federal Reserve Chair Jerome Powell. In Philadelphia on Tuesday, Powell suggested that another interest rate cut could come later this month in the US.
In Europe, shares in Netherlands-headquartered ASML, which makes equipment used in the production of AI chips, jumped after the company posted promising results on Wednesday.
The shares rose more than 4%, after Europe’s largest company by market value reported third-quarter earnings fuelled by the AI boom. ASML’s stocks have rallied by almost 50% since August.
Meanwhile, on Wednesday, French multinational luxury group LVMH said its organic growth re-entered positive territory in the third quarter. The luxury giant’s shares jumped by more than 14% by 13.00 CEST.
The mood in France also shifted on news that the government had significantly improved its chances of surviving a looming no-confidence vote on Thursday.
On Tuesday, Prime Minister Sébastien Lecornu won the much-needed support of the Socialist Party in France’s National Assembly, in exchange for suspending a pension law that raises the retirement age. The CAC 40 in Paris jumped over 2% by 13.00 CEST.
The main European benchmark stock exchanges were also in the green, except for London’s FTSE 100, which lost 0.43%. Meanwhile, the DAX in Frankfurt gained less than 0.1%. Milan’s FTSE MIB was up by 0.36%, Madrid’s Ibex 35 gained 0.71% and the STOXX 600 saw a 0.6% gain.
Gold continued its rally, hitting a high of $4,217 per ounce. Gold has soared over 60% in 2025 as investors seek a safe haven during a period of uncertainty, notably driven by US tariffs and trade tensions.
Global markets are on the rise after the Fed Chair’s words
Federal Reserve Chair Jerome Powell signalled on Tuesday that the Fed is slightly more worried about the job market, raising expectations that the central bank will come through with another rate cut.
“Rising downside risks to employment have shifted our assessment of the balance of risks,” he said at a meeting of the National Association of Business Economics in Philadelphia.
Traders took his words to heart, particularly as the US government shutdown has prevented the release of fresh economic data.
“[Investors were] reading Powell like a haiku — every pause, every syllable weighed for hidden meaning,” Stephen Innes of SPI Asset Management said in a commentary.
“The message, once decoded, was clear enough: two rate cuts aren’t just a possibility, they’re the main course,” Innes said.
The central bank cut its benchmark interest rate by a quarter of a percentage point in September amid worries that unemployment could worsen.
“Markets have been lifted by the rekindling of rate cut expectations in the US after comments from Fed chair Jerome Powell, which highlighted sluggish hiring were taken as an indication that not one, but two further cuts were very much on the table for 2025,” said Danni Hewson, AJ Bell head of financial analysis.
“Buoyed by continued deal-making in the frothy AI sector, investors seem prepared to overlook the growing number of warnings about the potential for a market correction at the moment, but this earnings season will be crucial if that optimism is to continue.”
S&P 500 futures rose 0.64% during the early afternoon in Europe, while Dow Jones Industrial Average futures gained 0.41%. Nasdaq futures were up by 0.79%.
On Tuesday, US markets closed a mixed trading day, with the S&P 500 giving up 0.16% and the Dow climbing 0.44%. The Nasdaq composite dropped 0.76%.
Markets remain volatile as the US and China exchange threats of new trade sanctions and tariffs.
Technology stocks are hypersensitive to trade issues since big chipmakers and other companies rely on China for raw materials and manufacturing. China’s large consumer base is also important for its sales growth.
In other dealings early Wednesday, US benchmark crude oil was circling around $58.65 per barrel (€50.43) and Brent crude, the international standard, was traded around $62.24 (€53.52) per barrel.
The US dollar slipped 0.25% against the Japanese yen, while the euro rose 0.19% against the dollar. The British Pound gained 0.35% against the greenback.