European Stocks Swing on Fading Rate-Cut Hopes, US-China Talks

(Bloomberg) — European stocks swung between narrow gains and losses on Thursday afternoon, with sentiment veering between a dimmer outlook for monetary policy easing and optimism around US-China trade talks.

The Stoxx Europe 600 Index fell as much as 0.3% before closing 0.2% higher, as US President Donald Trump and Chinese President Xi Jinping agreed to further trade talks. Meanwhile, the European Central Bank signaled it was nearing the end of interest-rate cuts. Markets pared bets on further reductions, boosting the euro.

“The comments from President Lagarde were more hawkish than expected,” said Wolf von Rotberg, equity strategist at Bank J. Safra Sarasin. “Higher rates and a stronger euro weigh on the equity market, while stronger macro data will take some time to materialize.” 

Mining and construction stocks led the advance Thursday. Travel and leisure shares fell after Trump signed a proclamation that bans individuals from 12 countries from entering the US. Payments company Wise hit a record high on plans to transfer its primary listing from the London Stock Exchange to the US.

European stocks have rebounded from their April lows as Trump paused some tariffs. However, with economic jitters lingering, the focus will be on key US jobs data due Friday.

“We remain optimistic that better macro data for the euro zone will come later this year,” Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, said before the ECB’s announcement. “We are still constructive on Europe and think one nice-catch up play could be European small caps, which remain under-owned and cheap.”

In other individual stock news, Wizz Air Holdings Plc plunged 28% after the discount airline reported earnings that missed estimates and refrained from providing a guidance, citing poor visibility.

For more on equity markets:

• Europe’s Rally Needs More Than Just ECB Rate Cuts: Taking Stock
• M&A Watch Europe: Marlowe, L’Oreal, UniCredit, Acea, SES, Wise
• Saudi’s IPO Momentum Faces Challenge From Weak Debuts: ECM Watch
• US Stock Futures Little Changed; ChargePoint, CyberArk Fall
• Billions For Building: The London Rush

You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.

–With assistance from Michael Msika and Neil Campling.

©2025 Bloomberg L.P.