European shares ended lower on Friday, with requests across the region slipping as investors reassessed their prospects for US interest rate cuts.
The mood cooled noticeably after several US Federal Reserve officers delivered conservative reflections, dampening expedients for an early shift in financial policy.
The decline came indeed as the STOXX 600, the crucial standard for European equities, still managed to sculpt its strongest daily gain since September.
That daily rise was fuelled before by sanguinity around US profitable data and the end of the prolonged American government arrestment, both of which had helped lift sentiment across European stock markets.
By the closing bell, the pan-European STOXX 600 had fallen 1 to 574.81, with banks leading the decline, down 2.4.
Technology stocks also plodded, dropping 1.4 after touching a seven-week low during the session, adding to wider concern among investors in Europe.
Numerous dealers had hoped fresh US profitable data would point to a softer outlook, giving the Fed space to cut rates in December. But those prospects snappily faded as further policymakers stressed the need for caution.
Anthi Tsouvali, multi-asset strategist at UBS Global Wealth Management, warned of the potential impact on European stock markets.
“If indeed (US markets are) in bubble territory and the fact that the Fed won’t ease, it will be bad for equities and would definitely have a spillover effect into European markets.
The tech sector within Europe is very small, but it could have a ripple effect. A lot of times, it’s about sentiment. So when sentiment goes down, unfortunately, it impacts a lot of markets,” she said.
Despite the broad withdrawal, not all European stocks suffered. Luxury giant Richemont rose 5.9% after delivering daily deals comfortably ahead of vaticinations, giving a boost to the wider luxury sector.
Siemens Energy climbed 9.4 after publicizing its first tip in four years and raising its medium-term outlook, news that went down well with the request.
UK Markets See Pressure as Fiscal Concerns Reappear
In the UK, the FTSE 100 slipped 1.1%. Rising gilt yields weighed on the index after reports suggested Chancellor Rachel Reeves had abandoned plans to raise income tax rates in the upcoming Budget.
The move triggered renewed questions about how the government intends to manage the country’s finances.
Michael Field, chief equity strategist at Morningstar, noted the limits of alternative revenue options.
“There are things they (the government) can do around, you know, tinkering around the edges in terms of capital gains and property taxes and things like this. But ultimately none of those things are big enough to move the needle,” he said.
Eurozone Economy Posts Steady Growth
Fresh data from the eurozone showed the region continued to expand at a modest but steady pace in the third quarter.
The trade deficit also widened in September, helped by strong exports to the US, furnishing a small but welcome boost for the Eurozone frugality.
Elsewhere across European markets, the picture was mixed.
- Swedish firm Nibe Industrier slid 12.9% after releasing its third-quarter results.
- Danish vaccine maker Bavarian Nordic dropped 5.7% after narrowing its 2025 revenue outlook, with chair Luc Debruyne confirming he would step down.
- German IT provider Bechtle surged 14.9% after reporting what it described as “strong” Q3 performance, making it one of the session’s standout gainers.
Overall, the day’s moves reflected a conservative tone as dealers balanced ongoing queries over US financial policy with original profitable and political enterprises.
For now, European shares remain sensitive to shifts in global sentiment, and the coming weeks are likely to bring further volatility as investors wait for clearer signals from the Federal Reserve.
