FX.co ★ European Stocks Lack Direction

On Wednesday, the STOXX 50 and STOXX 600 indices remained relatively unchanged as investors grappled with ongoing geopolitical developments and pivotal central bank actions. The financial markets continued to keep a vigilant eye on the unfolding conflict between Israel and Iran, now in its sixth day, with no indications of a ceasefire. Concerns linger about a possible escalation and increased U.S. involvement, especially following President Trump's demand for Iran’s unconditional surrender. Meanwhile, investors were also cautious ahead of the Federal Reserve's monetary policy announcement. Although it is largely anticipated that the central bank will maintain the current federal funds rate, market participants are primarily focused on the forthcoming updates to economic projections. In the European context, the United Kingdom experienced a slight deceleration in its inflation rate, which fell to 3.4% in May, yet it remains near its highest point in over a year. Concurrently, Sweden's central bank, the Riksbank, lowered interest rates by 25 basis points as predicted. On the corporate scene, shares of companies such as Novo Nordisk (-1.7%), AstraZeneca (-1.4%), and Sanofi (-1.2%) recorded significant declines.