Europe equities subdued as investors await U.S. Fed updates

The pan-European Stoxx 600 index closed flat at 559.07, while major bourses were mixed

European equities were subdued on Thursday as investors awaited updates from the U.S. Federal Reserve symposium, while the U.S. and European Union locked in a framework trade deal reached last month.

The pan-European Stoxx 600 index closed flat at 559.07, while major bourses were mixed.

The EU said it would strive to ensure lower US tariffs apply to its car exports retroactively, as the EU and US detailed commitments made in a deal reached last month.

Officials said the deal did not include wine and spirits but the door was not closed to such tariff cuts.

European automobiles stocks, however, were down 0.4%.

There’s a sort of fatigue creeping in about these trade deals and a certain amount of scepticism, said Chris Beauchamp, chief market analyst at IG Group.

This doesn’t really close the issue of tariffs. It’s now a question of how far does it impact profit margins and inflation, he added.

Most consumer-facing sectors such as retail and personal goods declined, following gains on Wednesday.

On the flip side, rising oil prices lifted the energy sector 0.9%, while defence stocks added 1.7%, after facing pressure this week on expectations of a Ukraine-Russia peace deal.

In the US, focus will be on the country’s central bank Chair Jerome Powell’s speech for hints of possible rate cuts this year.

Analysts expect Powell won’t commit to a September rate cut, but markets have largely priced in a 25 basis point cut after a weak US jobs report earlier this month.

Beauchamp said that embracing a September cut “will be a cautious commitment from a chief who wants to end his term as an independent agent and not a creature of the president”.