European stocks edge higher as global markets await Fed rate cut

LONDON — European stocks inched higher on Wednesday, as markets awaited the latest monetary policy decision by the U.S. Federal Reserve, which is expected to lower interest rates.

The pan-European Stoxx 600 was trading 0.1% higher at 1:53 p.m. in London (8:53 a.m. ET), with most sectors in positive territory.

Looking at individual stocks, wind energy developer Orsted gained 2.6%, putting the shares on track to break a four-day losing streak. Orsted shares have been selling off amid the company’s plans to issue shares at a deep discount, which comes as the Trump administration pushes back on wind energy development in the United States.

British grocery giant Marks & Spencer rose toward the top of the Stoxx 600, adding 4.8%.

The latest U.K. inflation figures showed on Wednesday that annual price growth held steady at 3.8% in August. The print also revealed that food prices had risen to 5.1% on an annualized basis in August, while alcohol and tobacco prices hit 5.9%.

Sainsbury’s shares were also extending gains that began on Monday after the company ended talks to sell its Argos brand to China’s JD.com, advancing 1.2%.

Meanwhile, defense stocks were also on the rise, with the Stoxx Aerospace and Defense index gaining 0.3% in early trade.

On Tuesday, it was reported that Indian troops had joined a military drill with Russian and Belarusian forces near Minsk, days after Russian drones entered Polish and Romanian airspace.

Germany’s Rheinmetall and Hensoldt gained 1.2% and 2.5%, respectively, while Sweden’s Saab was up by 2.2%.

Global markets are also focused on the Fed today with the central bank widely expected to cut interest rates by 25 basis points, according to the CME’s FedWatch tool.

Policymakers will also share more insight into their outlook for rates over the next year or so in the closely-watched “dot plot” grid that accompanies their quarterly Summary of Economic Projections.

European markets moved lower on Tuesday as investors assessed developments in the U.S.-China trade talks that took place in Madrid earlier this week.

U.S. Treasury Secretary Scott Bessent told CNBC on Tuesday that he expected further trade discussions between Washington and Beijing to take place before punitive tariffs are set to take hold in November.

“We’ll be seeing each other again,” Bessent said. “Each one of those talks has become more and more productive. I think the Chinese now sense that a trade deal is possible.”

Tariffs rolled out by U.S. President Donald Trump in April would have seen 145% duties slapped on Chinese imports into the U.S., but these were delayed to allow for trade negotiations, with a deadline currently set for Nov. 10.

In other news, Trump’s state visit to the U.K. is in full swing on Wednesday, with the president and his wife, Melania, spending the day at Windsor Castle with King Charles and Queen Camilla before holding talks with U.K. Prime Minister Keir Starmer on Thursday.