European Stocks Edge Higher Amid Geopolitical and Central Bank Uncertainty
European markets opened slightly higher on Tuesday as investors digested a mix of geopolitical tensions, a high-profile investigation into the U.S. Federal Reserve Chair, and key corporate developments. The pan-European Stoxx 600 index was up 0.1% in early trading, with regional bourses showing mixed performance.
Individual stock movements were notable. Shares of Danish renewable energy firm Ørsted surged 5.4% after a U.S. judge ruled it could resume work on its $5 billion Revolution Wind project, which had been suspended by the Trump administration. Meanwhile, Swiss bank UBS gained 0.7% following a Financial Times report that CEO Sergio Ermotti will step down in April 2027, a move the bank declined to comment on.
Powell Investigation and Iran Tensions Weigh on Sentiment
The market continues to assess the implications of a criminal investigation into Federal Reserve Chair Jerome Powell, related to testimony about the renovation of the Fed's headquarters. Powell has called the probe a politically motivated attempt to influence monetary policy ahead of the end of his term in May. Concurrently, geopolitical risks are elevated as President Trump weighs options against Iran amid widespread protests and a violent government crackdown, threatening tariffs on countries doing business with Tehran.
Investor attention is now shifting to upcoming U.S. economic data and corporate earnings. The December consumer price index report, due later Tuesday, is expected to show a 2.7% annual increase, providing a clearer inflation picture after last fall's government shutdown disrupted data. Additionally, the fourth-quarter earnings season kicks off with reports from major banks, starting with JPMorgan. U.S. stock futures pointed to a slightly lower open ahead of these releases.
