- The Fed will release new economic and interest rate forecasts, which could indicate that the central bank's officials expect to raise rates by, or even before, 2023.
- The Fed is expected to acknowledge stronger growth, which should put the Fed's easy policies in the spotlight, especially given the new $1.9 trillion in federal stimulus spending.
LONDON — European stocks closed lower on Wednesday as global investors awaited the outcome from the latest meeting of the Federal Reserve.
The pan-European Stoxx 600 index provisionally closed down 0.4%, with mining stocks shedding 1.9% to lead losses while autos continued to rally, climbing 3.1%.
Investors are waiting for the outcome of the Fed's two-day policy meeting. The U.S. central bank will release new economic and interest rate forecasts, which could indicate that the central bank's officials expect to raise rates by, or even before, 2023.
The Fed is expected to acknowledge stronger growth, which should put its easy policies in the spotlight, especially given the new $1.9 trillion in federal stimulus spending. Investors will also hear from Chair Jerome Powell, who is likely to rock the stock and bond markets with his commentary, despite him being unlikely to offer specifics.
Wall Street also opened in negative territory Wednesday ahead of Powell's remarks, with tech stocks leading the way as rising bond yields hit the sector once again. During afternoon trade in Europe, the yield on the benchmark U.S. 10-year Treasury note was up sharply at 1.6762%.
Oil prices are also in focus after they fell Tuesday, as traders are worried about fuel demand recovery. That came after more European countries suspended the use of Covid vaccine from Oxford University and drugmaker AstraZeneca, which implied economic recovery from the pandemic may potentially be delayed.
The World Health Organization and European Medicines Agency are carrying out safety reviews of the vaccine, with results expected shortly, but have insisted that available data shows the vaccine is safe and that its benefit outweighs any risks, while the pandemic's impact is still acute in Europe.
Volkswagen shares continued Tuesday's climb to add a further 11% to lead the Stoxx 600 after forecasting deliveries and earnings growth at its core brand in 2021.
At the bottom of the European blue chip index, Austrian electricity company Verbund dropped 7.9% after forecasting a fall in profit for 2021.
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