Today's Edition
LONDON (REUTERS)
European shares struggled for direction on Wednesday while US futures ticked up after a selloff on Wall Street, as investors waited for the Federal Reserve rates decision later in the day.
The pan-European STOXX 600 index was last flat after rising for the three previous sessions, boosted by Germany's overhaul of its debt rules to spend far more on defence and infrastructure.
Germany's DAX index fell 0.3% after hitting a record high on Tuesday.
US equity indices slid on Tuesday as investors continued to worry about a slowdown in growth. The S&P 500 shed 1.1% and tech stocks were particularly hard hit with the Nasdaq index falling 1.7% on Tuesday.
Futures pointed to a higher open on Wall Street on Wednesday with S&P contracts ticking up 0.3%.
US stocks have tumbled this year as US President Donald Trump's stop-start tariffs have sown uncertainty among companies, households and investors.
European shares have fared much better, thanks to plans to ramp up defence spending in response to Trump's more isolationist policies, the major fiscal changes in Germany, and hopes of an end to the war in Ukraine.
"There's still a continuation of the notion of a US growth slowdown relative to expectations," said Tim Graf, head of EMEA macro strategy at State Street.
"There's a realisation that growth will probably get worse before it gets better."
In currencies, the dollar index ticked up 0.3% to 103.61 after dropping to a five-month low of 103.19 on Tuesday as the euro rallied on the approval of the German spending bill by parliament's lower house.
Attention now turns to the Fed, which traders expect will hold rates in the 4.25%-4.50% range. Investors will focus on new economic projections amid tumbling stock markets and signs of tightening credit.
Markets are pricing in almost 60 basis points of easing this year from the Fed, with the first cut fully priced in for July, LSEG data showed.
