Europe stocks slip; commodity, defence rallies offset by luxury losses (updated)

LANXESS AG

24/09/2025 09:56

Updates with graphic and closing levels

Defence stocks rise after Trump's Ukraine comments

Germany's Lanxess, Evonik down after DB rating downgrade

By Shashwat Chauhan, Amir  Orusov and Pranav Kashyap

Sept 24 (Reuters) -
European stocks slipped on Wednesday as commodity and defence rallies faced resistance from heavyweight healthcare and luxury names, with investors parsing fresh signals from Federal Reserve Chair Jerome Powell.

The pan-European STOXX 600 .STOXX closed 0.2% lower, while regional bourses were mixed. The French benchmark .FCHI led losses, down 0.6%.

The basic resource sector .SXPP jumped 1.8% as copper prices rose to a 15-month high, while crude prices hit a three-week high, pushing the energy sector .SXEP up 1.5%.

 Anglo American AAL.L surged 4.7% after Endiama
bid for a minority
 stake in the miner's diamond unit De Beers.

Defence stocks, including Rheinmetall RHMG.DE, Hensoldt HAGG.DE and SAAB SAABb.ST, rose between 3% and 8% after U.S. President Donald Trump said he believed Ukraine could retake all its land occupied by Russia and that Kyiv should act now.

Losses in heavyweight luxury stocks such as LVMH LVMH.PA, Hermes HRMS.PA, Richemont ROG.S and EssilorLuxottica ESLX.PA kept STOXX 600 gains in check.

The subindex for luxury stocks .SXFP dropped 1.5%.

 Meanwhile, healthcare stocks .SXDP slipped 0.6%, with heavyweights AstraZeneca AZN.L and Roche ROG.S down 2% and 0.4% respectively.

Automobile stocks .SXAP pared losses and closed 0.6% lower after Bloomberg News reported that Washington formalized lower auto tariffs, effective August 1.

Wall Street stocks also stumbled as investors combed through Powell's latest remarks, which offered little clarity on the Fed's path ahead for interest rates.

 Traders are betting on at least one more rate cut this year, with odds of an October move topping 94%, according to the CME FedWatch Tool.

The Fed's first rate cut of 2025 last week lit a fire under global assets, lifting European and U.S. equities. But after a strong start to the year — fueled by gains in defense stocks — European shares have lost momentum, trailing their U.S. peers amid a relentless artificial-intelligence-driven rally that has pushed American benchmarks to record highs.

 "The risk is the Fed turns more dovish by the time of the December meeting because restrictive monetary policy can worsen the employment backdrop and upside risks to inflation are not materializing," said Elias Haddad, senior markets strategist at Brown Brothers Harriman.

 The STOXX 600 sits about 2% shy of its March peak, up about 9.2% year-to-date. Meanwhile, the S&P 500 has risen close to 13%.

Lanxess LXSG.DE fell 6.6% after Deutsche Bank downgraded the German chemical company's stock to "hold" from "buy".

A survey of German business morale showed an unexpected decline in September as the economic outlook remained weak.

Euro's STOXX 600 VS S&P 500 https://tmsnrt.rs/4nkGrkA

(Reporting by Shashwat Chauhan and Pranav Kashyap in Bengaluru and Amir Orusov in Gdansk; Editing by Mrigank Dhaniwala and Richard Chang)

((Shashwat.Chauhan@thomsonreuters.com; amir.orusov@thomsonreuters.com))