European stock markets traded mixed on Thursday as investors assessed a heavy flow of corporate earnings across the region, while also digesting the Federal Reserve’s decision to keep interest rates unchanged.
By mid-morning trading, Germany’s DAX slipped 0.7%, while France’s CAC 40 rose 0.9%. In the U.K., the FTSE 100 gained 0.6%.
Fed pause shapes global sentiment
The Federal Reserve held its benchmark interest rate steady on Wednesday, extending a pause after a series of cuts late last year. Fed Chair Jerome Powell said policymakers need clearer evidence that inflation is moving sustainably toward the 2% target before considering further easing, while noting that economic growth remains resilient.
Market participants interpreted the message as a sign of caution from the central bank. Futures pricing suggests rates will remain on hold in the near term, with expectations for additional cuts later this year.
In Europe, attention also turned to upcoming euro zone data, including January readings on consumer confidence and business sentiment, which are expected to show modest improvement.
Earnings season intensifies in Europe
Corporate results dominated trading as earnings season picked up pace. Deutsche Bank reported a record fourth-quarter pretax profit, driven by strong performance in its global investment banking operations. However, the results were partly overshadowed by a recent police investigation related to alleged money laundering.
Nokia posted a sharp drop in fourth-quarter operating margins, hit by restructuring costs and expenses tied to its Infinera acquisition. The company also warned that first-quarter 2026 sales could fall more than typical seasonal patterns.
Nordea Bank delivered better-than-expected quarterly profit, supported by stronger net interest income and fee generation. ING Group reported a record profit for 2025 and reaffirmed plans to return around half of its capital generation to shareholders through 2027.
Swiss industrial group ABB reported a strong fourth quarter and issued upbeat guidance for early 2026, supported by solid orders and improving margins. Meanwhile, Roche posted a sharp rise in annual profit and forecast further growth next year, helped by strong demand for newer medicines.
Sanofi said it expects high single-digit sales growth in 2026, driven by continued demand for its asthma drug Dupixent. In contrast, STMicroelectronics reported a quarterly loss and warned of lower first-quarter revenue due to restructuring costs and softer automotive demand.
U.S. tech results add to volatility
European investors also reacted to earnings from major U.S. technology companies. Meta Platforms shares jumped in post-market trading after the company issued a strong revenue outlook tied to AI-driven advertising tools. Tesla also exceeded expectations, offering some support to growth stocks.
However, Microsoft shares slipped after results highlighted rising costs linked to heavy artificial intelligence investment, tempering sentiment across the tech sector.
Oil prices surge on Iran concerns
Oil prices climbed sharply on Thursday as fears grew that the United States could carry out military action against Iran, raising concerns over potential supply disruptions.
Brent crude rose 1.3% to $68.26 a barrel, while U.S. West Texas Intermediate gained 1.5% to $64.18. Both benchmarks are up around 5% since the start of the week, trading at their highest levels since late September.
U.S. President Donald Trump has stepped up pressure on Iran to curb its nuclear program, amid reports that Washington is considering further military measures. Iran is the fourth-largest producer within OPEC, pumping roughly 3.2 million barrels per day.
Oil prices have also been supported by supply disruptions in the United States, where severe winter weather has temporarily taken an estimated 2 million barrels per day of production offline.
