European equity markets opened cautiously on Wednesday, stabilizing after Tuesdayโs losses as investors weighed geopolitical developments and awaited the Federal Reserveโs rate decision.
The ongoing conflict between Israel and Iran remained a major source of concern, with President Trump intensifying rhetoric by calling for Tehranโs โunconditional surrenderโ and considering direct action against the Iranian leadership.
Regionally, focus turned to UK inflation data, which showed a slight deceleration in May, broadly in line with expectations. The release provided some relief for the Bank of England and could support broader European risk sentiment, especially in rate-sensitive sectors.
Looking ahead, the outcome of the Federal Reserveโs meeting will be pivotal for global risk assets. While no change in rates is anticipated, Chair Powellโs tone and the updated Summary of Economic Projections could shape market sentiment and influence European equities.
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