EU Stock Market Today: European Shares Dip as Fed Decision and ECB Outlook Loom

European stock markets traded slightly lower on Wednesday, 10 December 2025, with the pan‑European STOXX Europe 600 edging down for a fourth straight session as investors stayed cautious ahead of a pivotal U.S. Federal Reserve rate decision and fresh guidance from the European Central Bank (ECB). ^[1]

Below is a detailed look at how major EU indices, sectors and key stocks performed today, and what the latest forecasts say about the outlook for 2026.

Market snapshot: small moves, cautious tone

By late morning in Europe, the STOXX Europe 600 was down around 0.1–0.2% near 576–577 points, putting it on track for a fourth consecutive daily decline. ^[2]

Germany’s DAX: German equities underperformed, with the DAX down roughly 0.5% at one point in the morning, according to Reuters, after a flat finish the previous day. ^[3]
Spain’s IBEX 35: Also weaker, slipping around 0.2% in early trade. ^[4]
France’s CAC 40: The CAC 40 traded in the red for most of the session. Around midday it was down about 0.4%at 8,016.78, weighed by industrials and defence stocks. ^[5]
UK’s FTSE 100: London was a relative bright spot. The blue‑chip FTSE 100 was up about 0.1% in late morningand roughly 0.3% around midday at 9,673.64, while the more domestically focused FTSE 250 dipped slightly. ^[6]

Intraday commentary showed both the STOXX 50 and STOXX 600 “hovering around the flatline,” underlining how reluctant traders are to take big positions with central‑bank decisions looming. ^[7]

Fed decision dominates global risk mood

The main macro story today is not European at all — it’s the U.S. Federal Reserve.

Markets are pricing in an almost certain 25‑basis‑point Fed rate cut, but the real focus is on the so‑called “dot plot” of policymakers’ forecasts and Chair Jerome Powell’s guidance for 2026. ^[8]

Futures imply the Fed will lower the target range to roughly 3.50–3.75%, with traders assigning close to a 90% probability to a move later today. ^[9]
However, markets see only limited odds of another cut as soon as January, raising the risk of a “hawkish cut”scenario: a rate reduction paired with messaging that further easing will be slow and data‑dependent. ^[10]

A global Reuters wrap noted that European stocks and S&P 500 futures were each off by about 0.1%, reflecting a broad “wait‑and‑see” stance as investors weigh not just rates but lofty AI‑related earnings expectations in the U.S. tech space. ^[11]

For EU equities, that means:

Muted volumes and tight trading ranges today.
Potential volatility tomorrow, once markets have had a chance to digest the Fed’s new projections.

ECB: rates “in a good place” and likely on hold to end‑2026

If the Fed is today’s headline, the ECB is the slow‑burn story shaping the medium‑term outlook for EU stocks.

At a Financial Times event, ECB President Christine Lagarde said the eurozone economy has proved more resilient than expected to trade tensions and higher U.S. tariffs, and that growth is now running close to potential. That resilience could prompt the central bank to upgrade its growth projections again at next week’s policy meeting. ^[12]

Crucially for markets, Lagarde repeated that monetary policy is in a “good place”, which investors interpret as a strong signal that no near‑term rate change is coming. ^[13]

A fresh Reuters poll of 96 economists, released today, backs that view: ^[14]

All respondents expect the ECB to hold the deposit rate at 2% at the 18 December meeting.
Around 80% think rates will be unchanged through mid‑2026, and nearly 75% expect no move until the end of 2026.
Eurozone inflation is seen easing from 2.2% now to about 2.1% in Q4 2025 and 1.7% in early 2026, remaining below the 2% target across 2026.
Growth is forecast to average around 1.4% in 2025 and 1.1% in 2026, with downside risks from a softer labour market and potential disappointment on German fiscal stimulus.

Taken together, the Fed and ECB setups suggest a higher‑for‑longer but stable rate environment for Europe: not a rapid easing cycle, but also no imminent tightening shock. That backdrop tends to favour:

Quality cyclicals and financials, which benefit from growth resilience and positive yield curves.
Income strategies, as bond yields and dividend yields compete for capital.

Sector moves: insurers hit, energy and renewables shine

Beneath the flat headline indices, there was plenty of sector‑level action.

Insurers under pressure

The European insurance index fell about 0.8%, making it the worst‑performing major sector on the STOXX 600. ^[15]

The main drag was Aegon, which slumped around 8% after announcing plans to move its legal domicile and head office from the Netherlands to the U.S. ^[16]

Investors are still parsing what the relocation means for regulation, tax and shareholder returns, but the initial reaction was clearly risk‑off.

Industrials and defence stocks give back gains

Industrial stocks, which had supported the market in recent sessions, slipped about 0.5%. Defence names weighed heavily, and a broader European defence index gave back roughly 1.1% after a strong two‑day run where it had risen more than 2%. ^[17]

In France, that showed up directly in the CAC 40:

Thales was down nearly 3%.
Renault dropped about 2.25%, while Vinci and Euronext each lost close to 2%. ^[18]

Other heavyweight French names such as Accor, Hermès, Orange, Capgemini, Veolia, Dassault Systèmes, Stellantis, Sanofi and Michelin also traded 0.6–1.4% lower, underscoring widespread profit‑taking in Paris. ^[19]

Commodities, energy and miners edge higher

In contrast, commodity‑linked sectors fared better:

Oil & gas stocks gained about 0.7%.
Mining shares added roughly 0.6%. ^[20]

The move reflects both slightly firmer oil prices and a broader “real‑asset” bid in a world where inflation is near target but not dead, and where metals like silver are hitting fresh record highs. ^[21]

Renewables rally on upbeat U.S. peer guidance

One of today’s standout themes was a rally in European renewable‑energy names:

Nordex surged around 6%.
Siemens Energy rose roughly 4%.
Vestas Wind Systems climbed about 4.6%. ^[22]

The trigger: U.S. peer GE Vernova raised its 2026 revenue outlook and expanded its share buyback plans on Tuesday, providing a credibility boost to the wind and grid‑infrastructure investment story on both sides of the Atlantic. ^[23]

Delivery Hero jumps on strategic review

Another big gainer was Delivery Hero, up around 5% after the company said it is reviewing capital‑allocation measures and evaluating strategic options in a letter to shareholders. ^[24]

For a stock that has been through multiple swings as investors debate the sustainability of food‑delivery business models, any sign of portfolio discipline and focus on shareholder value tends to be rewarded.

Country focus: UK and France stand out

London: banks, media and transport in the spotlight

In the UK, FTSE 100 gains masked an undercurrent of stock‑specific news. According to a mid‑session Reuters update: ^[25]

The FTSE 100 was up 0.1%, while the FTSE 250 slipped 0.1%.
HSBC and Standard Chartered each climbed around 2% after BofA Global Research upgraded both banks.
Pearson and RELX rose about 1% and 3.9%, respectively, after J.P. Morgan named them top media picks, arguing that European media valuations are too depressed.
Volution Group gained 4.7% after acquiring Australian ventilation firm AC Industries.
FirstGroup rallied 5.5% after being chosen as preferred bidder for London’s Overground rail network, in a contract worth roughly £3 billion over an initial eight‑year term.
Berkeley Group added 2.7% as it reaffirmed annual guidance and expressed confidence in the London housing market despite reporting a drop in half‑year profits.

Investors are also watching for UK October GDP data due Friday, and increasingly pricing in a 25‑basis‑point Bank of England rate cut next week, with more easing in 2026 if inflation and the labour market continue to cool. ^[26]

Paris: politics, budget and stock pressure

In France, politics intersected with markets as lawmakers approved the 2026 social‑security budget, offering some relief to President Emmanuel Macron’s minority government. ^[27]

Still, the market tone was negative:

The CAC 40’s decline of around 0.4–0.5% was deeper than Germany’s early‑session move, reflecting concentrated selling in big industrial and defence names. ^[28]
Bright spots included Carrefour, up about 0.8%, helped by news that outdoor advertising group JCDecaux will partner with Carrefour, Carmila and Unlimitail to expand retail‑media operations in France and Spain. ^[29]

Sentiment check: fund managers are still bullish on Europe

Despite today’s soggy tape, survey data released in recent weeks suggest that institutional investors remain surprisingly upbeat about Europe.

A Bank of America European Fund Manager Survey, summarised by Investing.com, found: ^[30]

A net 77% of respondents expect stronger European growth over the next 12 months, the highest reading since mid‑2021.
A record net 92% expect European equities to rise over the coming year.
Earnings upgrades are seen as the main driver of future gains, cited by 77% of investors.
Positioning has tilted towards cyclical stocks, with a net 31% expecting cyclicals to outperform defensives.
Banks remain the biggest consensus overweight, followed by utilities and healthcare, while retail, media and food & beverages are the most under‑owned sectors.

At the same time, multiple valuation screens published through 2025 highlight that many European stocks still trade at steep discounts to estimated fair value, in some cases up to 40–50% below intrinsic value based on cash‑flow models. ^[31]

Put simply: today’s caution is not the same as long‑term pessimism. Investors are nervous about timing, not about Europe as an asset class.

2026 outlook: stable rates, modest growth, stock‑picker’s market

New research and strategy pieces released this week and over the past few days sketch out a cautiously constructive 2026 landscape for European equities:

The Reuters ECB poll points to unchanged ECB policy rates through end‑2026, with inflation gently below target and growth around 1–1.5% — a backdrop that is neither boom nor bust, but broadly supportive of corporate earnings stability. ^[32]
Commentary on Lagarde’s latest remarks from analysts at Investing.com suggests that another upward revision to the ECB’s growth projections would reinforce the idea that the eurozone slowdown has been less severe than feared, easing worries about recession. ^[33]
A BNP Paribas “Global Outlook 2026” note describes the macro backdrop as being “in a good place” overall, with moderate growth, contained inflation and lower FX volatility, though election cycles and fiscal deficits could periodically elevate risk premia. ^[34]
A recent Morgan Stanley “European Stock Market 2026 Investment Playbook” highlights themes such as re‑rating potential in quality industrials, opportunities in energy transition plays and financials with strong capital return policies, while flagging risks from weaker global trade and geopolitical shocks. ^[35]
A Trustnet feature titled “10 reasons why Europe could beat the US again in 2026” notes that Europe’s more balanced sector mix, potential for an easing of geopolitical tensions, and less crowded AI positioning could allow the region to outperform U.S. indices again after a strong 2025. ^[36]

Combine those pieces and a picture emerges of 2026 as a stock‑picker’s market in Europe, not a one‑way macro trade:

Index‑level returns are widely expected to be positive but more modest than 2025’s strong gains.
Dispersion across sectors and stocks is likely to remain high, rewarding careful selection.
Banks, industrials, renewables and selected tech/AI‑adjacent names feature prominently in many strategists’ preferred lists, alongside “undervalued quality” names in less loved sectors.

What today’s EU market action means for investors

For traders and longer‑term investors watching the EU stock market today, the key takeaways from 10 December 2025 are:

Short‑term: all about the Fed
- Price action is deliberately subdued as markets wait for clarity on the U.S. rate path.
- Volatility could pick up tomorrow as European markets respond to the Fed’s decision and any surprises in the dot plot.
Medium‑term: ECB stability is a support, not a headwind
- With inflation near target and growth resilient, the ECB is signalling “do nothing” — which markets tend to like.
- A prolonged pause at 2% keeps financing conditions predictable for corporates and households. ^[37]
Sector signals to watch
- Today’s weakness in insurers and defence looks more stock‑specific and profit‑taking driven than a structural reversal, though it highlights how crowded some 2025 winners have become. ^[38]
- Strength in banks, renewables, commodities and selected UK domestics shows ongoing appetite for cyclical exposure and income. ^[39]
Sentiment vs. price action
- Surveys show fund managers are as bullish on European growth and equities as they’ve been since 2021, even though today’s market looks hesitant. ^[40]
- That gap between optimistic expectations and short‑term caution is exactly where volatility — and opportunity — tends to live.
For long‑term investors
- Europe remains relatively cheap vs. fundamentals by many valuation measures. ^[41]
- With rates likely to stay put, the drumbeat from strategists is to focus on earnings durability, balance‑sheet strength and secular growth themes (energy transition, reshoring, digital infrastructure) rather than trying to second‑guess every central‑bank headline.

This article is for information and commentary only and does not constitute investment advice. Markets can move quickly around central‑bank announcements; investors should consider their own objectives and risk tolerance or consult a qualified adviser before making decisions.