European stocks close higher as investors eye lower oil prices, China stimulus

Europe's Stoxx 600 index closed 0.66% higher Wednesday, with all sectors and major bourses gaining.

Germany's DAX rose 0.99% while the U.K.'s FTSE 100 and France's CAC 40 added 0.65% and 0.52%, respectively.

— Jenni Reid

On Wall Street, the S&P 500 hit a fresh record high amid technology sector gains, cooling oil prices and hopes of a U.S. economic soft landing.

Investors are meanwhile awaiting the latest meeting minutes from the Federal Reserve due at 7 p.m. U.K. time (2 p.m. ET.)

— Jenni Reid

Shares of German pharmaceutical firm Bayer were 7% lower at 3:40 p.m. London time, after Washington's top court said it would review a case alleging people were harmed by exposure to chemicals in products made by the company's Monsanto unit.

Bayer said there was "no basis for a different outcome on appeal," and that it believed a prior Washington Court of Appeals' decision — which had ruled in its favor — had identified three errors in the initial case.

Bayer acquired U.S. agrichemical-maker Monsanto in 2018 and has since been embroiled in thousands of legal challenges over harms allegedly caused by its products.

— Jenni Reid

U.S. stocks opened little changed on Wednesday.

The S&P 500 and Nasdaq Composite hovered near the flatline, while the Dow Jones Industrial Average declines 60 points, or 0.15%.

— Samantha Subin

The European Central Bank is "very likely" to reduce interest rates at its monetary policy meeting on Oct. 17, Bank of France Governor Francois Villeroy de Galhau told radio station France Info on Wednesday.

Villeroy continued that the rate cut "won't be the last" despite likely "ups and downs" in inflation in the months to come, according to a CNBC translation.

"Victory against inflation is in sight," he told France Info.

Inflation in the euro area fell to 1.8% in September, below the ECB's 2% target, and cooled to 1.5% in France.

The ECB has cut interest rates twice already this year — in June and September — taking its key rate from 4% to 3.5% across the two trims.

Money market pricing as of Wednesday afternoon showed another 25-basis-point rate reduction fully priced in for October.

— Jenni Reid

Swedish automaker Volvo Cars on Wednesday announced deputy CEO Björn Annwall will step down from his current role as part of a management reshuffle designed to increase simplicity and collaboration in the organization.

It comes shortly after Volvo Cars abandoned its near-term goal of selling only electric vehicles (EVs), citing a need to be "pragmatic and flexible."

The auto industry currently faces a perfect storm of challenges on the path to full electrification, including a lack of affordable models, a slower-than-anticipated rollout of charging points and the impact of European tariffs on EVs made in China. Share of the carmaker were up 0.3% Wednesday.

Read more on the story here: Sweden's Volvo says deputy CEO to step down in management reshuffle as EV demand slows

— Sam Meredith

Alphabet shares were down more than 1% after the U.S. Justice Department indicated it was considering a breakup of the tech giant following a monopoly ruling.

The changes are necessary to "prevent and restrain monopoly maintenance could include contract requirements and prohibitions; non-discrimination product requirements; data and interoperability requirements; and structural requirements," the department said in a filing.

— Fred Imbert

European markets edged higher on Wednesday after a lackluster start to the day, with defensive sectors, including utilities, food and beverage and healthcare, in positive territory.

Defensive sectors tend to perform better in times of economic uncertainty, with market participants assessing the risks of Chinese market volatility, conflict in the Middle East and the trajectory for central bank interest rate cuts and inflation.

Mid-morning, the Stoxx 600 index was trading 1% higher, as all sectors rose except for banks, which dipped by 0.3%.

Looking at individual stocks in Europe, the biggest losers on the pan-European Stoxx index were pharmaceutical and biotechnology company Bayer, which was down 6.4%, along with Dutch lender ING, which shed 3%.

The best performer on the index was Continental, up 6.5% after the German car parts maker said on a pre-close call on Tuesday that it expects the profitability of its automotive business to improve in the third quarter despite lower sales, Reuters reported.

— Holly Ellyatt

Chinese stocks sold off in a volatile day of trading amid mixed Asia-Pacific markets Wednesday.

The mainland CSI 300 dropped 7.05%, snapping a 10-day winning streak and closing at 3,955.98, while Hong Kong's Hang Seng index tumbled 1.7% as of its final hour of trade in a choppy session.

On Tuesday, the HSI recorded its worst day in 16 years, closing 9.41% lower.

Other Asian markets climbed Wednesday, with Japan's Nikkei 225 rising 0.87% to 39,277.96, and Australia's S&P/ASX 200 edging up 0.13% and closing at 8,187,4.

— Lim Hui Jie

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U.K.-listed shares of Rio Tinto fell 0.6% lower after the Australian miner said it would acquire U.S. lithium producer Arcadium Lithium for $6.7 billion.

The firm's market value currently stands at $4.56 billion, according to LSEG data, with shares rallying 37% so far this week. Arcadium Lithium's share rose over 30% in pre-market trading.

News of the deal follows an announcement earlier this week that the two companies were in talks. If the deal goes through, Rio Tinto will become one of the largest suppliers of lithium.

Read more here: Mining giant Rio Tinto to acquire Arcadium Lithium in $6.7 billion deal

— Holly Ellyatt

Oil and gas sector stocks on the Stoxx 600 index rallied to trade 0.15% higher, after initially opening 0.2% down.

Oil prices steadied on Wednesday, as traders weighed up developments in the hydrocarbon-rich Middle East and potential Israeli attacks on Iran's oil infrastructure, amid a background of weaker global demand and ample supply.

Data reported by Reuters showed U.S. crude oil stocks rose by nearly 11 million barrels last week, much more than analysts polled by the news agency had expected, according to market sources citing American Petroleum Institute figures on Tuesday.

Brent crude futures rose 53 cents, or 0.67%, to $77.70 a barrel by 9 a.m. London time. U.S. West Texas Intermediate futures rose 42 cents to $73.98 a barrel.

— Holly Ellyatt

The pan-European Stoxx 600 index opened flat, up by a marginal 0.06%.

Sentiment brightened in early trades with banks, household goods, insurance, technology and travel and leisure as the only sectors in negative territory.

The FTSE 100 was the only major European index to be trading in positive territory on open, up 0.5%, with France's CAC 40, Germany's Xetra DAX and Italy's FTSEMIB all in red.

— Holly Ellyatt

Boston Federal Reserve President Susan Collins said Tuesday she expects more interest rate cuts ahead as inflation eases and the labor market cools.

"My confidence in the disinflation trajectory has increased – but so have the risks of the economy slowing beyond what is needed to restore price stability," Collins said in a speech to bankers in Boston. "Further adjustments of policy will likely be needed."

The central bank official noted that the Fed's "dot plot" after its September meeting pointed to an additional 50 basis points, or half percentage point, in reductions before the end of the year, though she did not specify whether she agrees with the consensus.

—Jeff Cox

The U.S. trade deficit fell more than 10% in August as exports surged, imports declined and the shortfall with China shrunk.

The goods and services imbalance totaled $70.4 billion for the month, down 10.8% from the upwardly revised $78.9 deficit in July, the Commerce Department reported Tuesday. Economists surveyed by Dow Jones were looking for $70.8 billion.

That came as exports rose $5.3 billion, or 2%, and imports declined by $3.2 billion, or 0.9%. However, the year to date trade deficit is still 8.9% higher than the same period a year ago.

—Jeff Cox

Crude oil futures were down nearly 3% in morning trading as fears of imminent retaliation by Israel against Iran have eased somewhat.

U.S. crude oil was down $2.25, or 2.92%, to $74.89 per barrel at around 9:17 a.m. ET. Global benchmark Brent had fallen $2.26, or 2.79%, to $78.67 per barrel.

Oil prices surged 13% through Monday's close since Iran launched about 180 ballistic missiles at Israel last week. Iran's attack had raised fears that Israel might retaliate by hitting the country's oil industry. President Joe Biden, however, has publicly discouraged Israel from taking this course.

The market was also disappointed that Chinese officials did not announce new stimulus at a press briefing Tuesday. Prior to the escalation in the Middle East, the oil market was swept by bearish sentiment on soft demand in China and worries that crude supplies will outpace global demand next year.

— Spencer Kimball

Good morning from London, and welcome to CNBC's live blog covering all the action and business news in European financial markets on Thursday.

Futures data from IG suggests a generally positive open for European indexes, with London's FTSE 100 seen opening 0.15% higher, France's CAC 40 and Germany's DAX are seen opening around the flatline, and Italy's FTSE MIB slightly higher.

The pullback in sentiment among European bourses comes ahead of the latest indicator of the state of health of major regional economies, with gross domestic product readings from the U.K. and European Union on Thursday.

European markets had ended the day higher on Wednesday, with the pan-European Stoxx 600 index rising 0.55% after the S&P 500 and Nasdaq Composite rallied to new records yesterday. Investors are gearing up for more inflation data to assess the state of the U.S. economy.

The producer price index, due Thursday, will be significant factors in the direction interest rates take at the Federal Reserve's next meeting in September.

— Holly Ellyatt