Europe stocks open higher ahead of Fed rate decision

European markets opened higher Wednesday, with investors awaiting the next interest rate decision from the U.S. Federal Reserve.

The Stoxx 600 index was up 0.4% in early trade, continuing positive momentum from the start of the week despite coming off the back of its worst monthly performance since September 2022.

Retail stocks led sector gains, up 1.4%, after U.K. clothing and homeware group Next hiked its profit outlook for the fourth time this year.

entral bankers are largely expected to hold rates steady, with fed funds futures pricing suggesting a more than 97% probability that rates will remain at current levels, according to the CME FedWatch Tool.

European markets traded higher Tuesday after data showed euro zone inflation fell to a two-year low of 2.9% in October, preliminary data showed Tuesday. Economists polled by Reuters expected 3.1%.

Meanwhile, statistics agency Eurostat said the euro zone economy contracted by 0.1% in the third quarter, below a forecast of stagnation.

The readings come after the European Central Bank paused its record run of 10 consecutive interest rate hikes when it met last week.

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