European equity benchmarks moved modestly higher on Wednesday as traders digested a large slate of quarterly results and risk appetite rebounded across global markets.
By 03:02 ET (08:02 GMT), Germany's DAX was up 0.1%, France's CAC 40 rose 0.2% and the U.K.'s FTSE 100 climbed 0.5%.
Market backdrop
Investor sentiment has warmed broadly, supported by easing uncertainty around a new round of U.S. trade measures. Commentary from the U.S. president indicated an intention to proceed with a tariff agenda during the State of the Union address, even after a Supreme Court ruling curtailed the use of the International Emergency Economic Powers Act for imposing tariffs. That ruling means further duties would likely require Congressional approval, which constrains the president's unilateral scope for new tariffs under the act.
Markets in the United States closed higher the prior day, and several Asian markets reached record highs overnight, including Japan, South Korea and Australia. These moves helped underpin the improved tone in European trading.
Key corporate reports
Investors faced a busy earnings schedule in Europe, with several large companies posting results that will influence sector sentiment.
- HSBC reported full-year results that beat analyst forecasts despite a 7% decline in pretax profit. The bank also set a net interest income target for 2026 that came in above expectations, a development the company framed as evidence that its strategic overhaul is complete and that it is positioned for further growth.
- E.ON delivered 2025 earnings in line with analyst expectations and raised its five-year investment plan to c48 billion. At the same time, the company flagged that its forecast for 2026 net profit sits below this year's level.
- Leonardo posted its strongest set of results in three years, with a 55% increase in new orders in its aeronautics division and a near halving of net debt, reflecting robust defense and aerospace demand in Europe and record bookings across its portfolio.
- Diageo, the world's largest spirits producer, cut its annual sales and profit forecasts for the second time in four months and reduced its dividend, citing weak demand in the U.S. and China.
- Nordex beat fourth-quarter expectations and issued fiscal 2026 guidance above consensus. The German wind turbine manufacturer also raised its medium-term profitability target.
- Adecco Group reported fourth-quarter earnings ahead of expectations, but its gross margin performance lagged guidance, generating questions about near-term profitability trends for the staffing firm.
Looking ahead - Nvidia and U.S. tech influence
Sentiment in European markets could be influenced later in the session by results from Nvidia (NASDAQ:NVDA), which is scheduled to report after the U.S. market close. Nvidia has beaten sales forecasts for 13 straight quarters, so market focus will be on the magnitude of any upside. Consensus forecasts compiled by LSEG expect profits to rise 62% in the quarter to end January and revenue to increase 68%.
Macro and economic datapoints
Data released earlier in the session showed the German economy expanded by 0.3% in the fourth quarter of 2025 versus the prior quarter, an improvement from the prior three months when growth was flat.
However, consumer sentiment indicators offered less encouragement. The GfK consumer sentiment index fell to -24.7 points for March from a revised -24.2 points in the prior month, contrary to expectations for a rise to -23.1. The index suggests consumer mood in Germany may deteriorate unexpectedly in March.
Energy and commodities
Oil prices remained elevated on Wednesday, trading near their highest levels in about seven months amid concern around U.S.-Iran nuclear talks and geopolitical tensions. Brent futures rose 0.4% to $70.86 a barrel, while U.S. West Texas Intermediate climbed 0.5% to $65.93 a barrel. Prices have been supported in part by U.S. military positioning in the Middle East aimed at pushing Iran toward negotiations over its nuclear program.
U.S. envoys, including a special representative and a presidential adviser, were scheduled to meet Iranian counterparts in Geneva on Thursday with hopes of reaching a nuclear agreement. The talks form part of the geopolitical backdrop that market participants are monitoring closely.
What this means for markets and sectors
The mix of corporate results highlights divergent dynamics across sectors. Banking reported encouraging signals on capital and net interest income targets, energy and utility companies are planning heavy near-term investment while flagging short-term profit variability, and defense groups benefited from increased European security-related spending. Consumer-facing businesses faced softness in major markets, and renewable equipment manufacturers reported stronger orders and raised profitability goals.
Investors will continue to weigh these corporate developments alongside macro indicators and geopolitical developments that could affect commodity prices and risk sentiment.