European Markets Rise on Fed Anticipation as BMW Shares Tumble

BMW shares dropped 8.3% following the company's decision to lower its annual outlook, citing sluggish demand in China and the broader economic toll of the U.S.-Iran conflict. Citigroup equity strategist Beata Manthey noted that the sector faces structural headwinds, a sentiment echoed by German automotive suppliers who report increasingly pessimistic business expectations. Conversely, the banking sector provided a strong counterweight, climbing 1.9% to mark its longest winning streak since early January. Technology firms also performed well, with Aixtron gaining 6.7% and ASML rising 4%.

Market focus now shifts to the Federal Reserve’s upcoming policy decision and the inaugural commentary from new Chair Kevin Warsh. Analysts suggest that while interest rates will likely hold steady, the market is bracing for an adjustment period regarding Warsh’s communication style. Meanwhile, Straumann led the STOXX 600 with a 10.8% surge after upgrading its 2026 profit targets. While the STOXX 600 continues to climb, it remains behind the S&P 500, with global sentiment hanging on the finalization of the U.S.-Iran agreement scheduled for Friday.