European stocks reversed early gains on Wednesday, with the STOXX 50 down 0.3% and the STOXX 600 slipping 0.2%. Investors were reluctant to take on sizable positions as they weighed renewed tensions in the Middle East—following reciprocal strikes by the US and Iran—and looked ahead to Thursday’s ECB monetary policy decision.
The ECB is widely expected to raise interest rates by 25 bps this month, and markets are focused on policymakers’ guidance regarding the future trajectory of monetary policy. In the US, attention is centered on the CPI report due later in the day.
Among individual stocks, HSBC Holdings fell 2.2%, extending losses among UK lenders after a JPMorgan note warned of a potentially larger hit from new Chinese regulations. SAP and Siemens Energy each declined 1.7%, while Thyssenkrupp dropped 3.5%.
On the upside, STMicroelectronics rose 1.2% after BofA Global Research upgraded the chipmaker to “buy” from “neutral,” and Infineon added 0.6%.
