European markets stall as rate hike jitters offset sector gains

Traders are recalibrating their expectations, currently pricing in a 49.5% probability of a September rate increase according to CME Group’s FedWatch tool. While the central bank maintained steady rates during Wednesday's session, the hawkish outlook continues to weigh on broader market confidence. Brent Crude prices slid toward $77 a barrel following reports of an interim agreement between the U.S. and Iran, a development that bolstered airline stocks like Air France and Lufthansa, which rose 2.7% and 0.9% respectively.

Corporate movements provided a divergent picture across sectors. Tech shares saw a 0.6% uptick, driven by chipmakers Infineon and Aixtron, both of which climbed over 4% in tandem with Asian market trends. Financials also saw action: Generali jumped 2.6% amid speculation that UniCredit is looking to expand its stake in the lender. Conversely, Tesco shares retreated 3.3% as the retailer reported a deceleration in first-quarter sales growth linked to geopolitical instability. Meanwhile, the French voucher firm Edenred surged 13.9% following reports that BC Partners is considering a potential takeover bid.