BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks were subdued on Wednesday as caution gripped markets ahead of the U.S. Federal Reserve's interest-rate decision later in the day and the signing of a peace deal between Washington and Teheran on Friday in Switzerland.
In economic releases, official data showed that U.K. consumer price inflation registered an annual increase of 2.8 percent in May, the same rate as seen in April. Prices were expected to climb 3.0 percent.
Factory gate inflation slowed marginally to 4.0 percent in May from 4.1 percent a month ago, while input prices grew 8.7 percent, the highest since February 2023 after rising 7.9 percent in April.
Separately, European Central Bank figures showed euro zone negotiated wage growth slowing to 2.6 percent by 2026, easing policymakers' concerns about inflation-driven pay demands.
Eurostat is set to release euro area final inflation figures for May later in the day. The flash estimate showed that inflation rose to 3.2 percent from 3.0 percent in April.
The pan-European STOXX 600 was marginally lower at 635.83 after rising 0.3 percent on Tuesday.
The German DAX dropped half a percent and the U.K.'s FTSE 100 slipped 0.2 percent, while France's CAC 40 was marginally higher.
Auto shares fell, with Germany's BMW tumbling 6.5 percent after cutting its 2026 outlook. Volkswagen declined 2.2 percent, Mercedes Benz lost 3.3 percent and Renault dropped 1 percent.
Defense technology company Thales rose about 1 percent after it entered into a strategic partnership with Renault Group to develop and industrialize the large-scale production of the TOUTATIS loitering munition.
Nokia added 1.3 percent after announcing it is significantly expanding its advanced test and packaging operations in Allentown, Pennsylvania.
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