Market Wrap: European Stocks Fall Ahead of Fed Decision and Big Tech Earnings

Date: April 29, 2026

Market Overview

European indices are experiencing a downturn, with the DAX index falling over 0.2%. Investors are currently evaluating the ongoing earnings season while awaiting the Federal Reserve's interest rate decision and earnings reports from major US technology firms. US index futures are also showing slight declines.

European Earnings Season

The earnings season in Europe has been inconsistent, with market participants looking for indications on how rising energy prices, particularly due to the conflict in Iran, may impact inflation and corporate profit margins. Europe is particularly vulnerable to increases in oil and gas prices due to its limited domestic energy supply. There is a growing expectation that persistent inflationary pressures could lead to a more cautious approach from central banks in the near future.

Key Market Movements

The Stoxx 600 index remained largely flat in early trading, reflecting a cautious sentiment ahead of significant central bank announcements. Notable movements include:

• UBS: Shares rose following strong first-quarter results, bolstered by robust investment banking activity, which has heightened expectations for shareholder returns.
• Deutsche Bank: Shares fell amid concerns regarding its exposure to the commercial real estate sector, highlighting ongoing risks within the banking industry.
• Adidas: The company saw a strong increase in stock price after reporting better-than-expected quarterly results and reaffirming its full-year guidance, driven by demand in various sports categories.

Sector Performance

In today's European session, the weakest sectors included luxury goods, retail, industrials, and utilities, as investors weigh the implications of the US-Iran conflict against the UAE's decision to exit OPEC+, which could gradually increase oil supply.

Oil and Inflation Outlook

Oil prices remain high as the market factors in the risks associated with a prolonged blockade involving Iran and potential supply disruptions from the Persian Gulf. Inflation continues to be a critical concern for bond markets, as rising energy prices could maintain upward pressure on yields, complicating central banks' efforts to ease monetary policy. The Federal Reserve is anticipated to keep rates unchanged, although discussions about future hikes persist if energy-driven inflation proves to be persistent.

Currency and Bond Markets

The US dollar is gaining strength amid elevated oil prices, while the euro is weakening against the dollar. The FX market is closely monitoring the 1.17 level on the EUR/USD pair as a key sentiment indicator related to Middle Eastern developments. Eurozone bond yields have increased slightly ahead of the European Central Bank meeting, with upcoming macroeconomic data likely to influence debt market pricing.

Commodities Update

The oil market is focused on peace negotiations, developments in the Strait of Hormuz, and US inventory data, which may provide insights into stockpile trends. Gold prices are edging lower, although ongoing geopolitical uncertainties continue to support investment demand and central bank purchases. Goldman Sachs maintains a bullish outlook on gold, projecting prices could reach $5,400 per ounce by year-end.

Corporate Highlights

Several companies reported significant developments:

• AstraZeneca: Reported revenue and earnings growth driven by strong sales in oncology and rare disease treatments.
• Kone: Agreed to acquire TK Elevator for approximately $24 billion, potentially creating the world's largest elevator manufacturer by sales.
• GlaxoSmithKline (GSK): Improved results due to strong specialty medicine sales and announced a higher dividend for 2026.
• TotalEnergies: Increasing shareholder returns, supported by stronger earnings linked to the Middle East conflict.

Additionally, Santander, Lloyds, and Deutsche Bank reported improved results, although investors remain cautious regarding credit quality and macroeconomic risks in the banking sector.

Conclusion

As the market awaits critical decisions from the Federal Reserve and earnings reports from major tech companies, the current landscape reflects a mix of cautious optimism and underlying risks, particularly related to inflation and geopolitical tensions.