Europe close: Stocks hit three-week low after US economic data
By Benjamin Chiou
Date: Thursday 25 Sep 2025
(Sharecast News) - European stocks posted moderate falls to finish at their lowest in three weeks on Thursday, tracking US indices lower amid nervousness around the Federal Reserve's future path for monetary policy.
"Investors are bound to be nervous in this period of all-time highs for US stocks, weak seasonal trends and following a speech by Powell that has caused some of the post-Fed dovishness to be wound back," said Chris Beauchamp, chief market analyst at IG.
Wall Street indices started the session on the back foot following stronger-than-expected data covering US GDP, jobless claims and durable goods.
US indices headed lower for the third straight day (their first three-day losing streak since the start of April) providing a dampener on European markets, with the Stoxx 600 down 0.7% at 549.93 by the close of play - its lowest close since 5 September.
"The strength of the US economic data has led to a mini recalibration of US interest rate expectations. On Wednesday, the market was pricing in a 90%+ chance of a rate cut in October, that is now 83%. Likewise, expectations for a December cut have also been scaled back," said Kathleen Brooks, research director at XTB.
This side of the Pond, Switzerland's central bank kept rates on hold at zero as it warned that Trump's tariffs had would hit the domestic economy going into 2026. The country was slapped with a shock 39% tariff rate on exports to the US at the end of July.
In other news, a closely followed consumer confidence survey in Germany came in better than forecasts on Thursday, but remained "extremely low" by historical standards. The forward-looking Consumer Climate Index from GfK and the Nuremberg Institute for Market Decisions (NIM) increased to -22.3 for October, up from a revised -23.5 in September. This was the first improvement in the measure in four months and ahead of the consensus forecast of -23.3.
Market movers
Swedish fashion retailer H&M surged 11% on better-than-expected third-quarter results. Sales rose 2% in local currencies to SEK57.0bn, ahead of the SEK56.8bn market forecast, while operating profits jumped 40% to SEK4.91bn, comfortably ahead of the SEK3.68bn estimate.
German software giant SAP was out of favour after the EU kicked off an official probe into possible anticompetitive practices related to its ERP products. "We are concerned that SAP may have restricted competition in this crucial aftermarket, by making it harder for rivals to compete, leaving European customers with fewer choices and higher costs," said EU competition chief Teresa Ribera.
Meanwhile, medical equipment makers such as Convatec, Siemens Healthineers, Gettinge, Demant, Sonova, Philips and Carl Zeiss Meditec all fell on news the US Department of Commerce has started investigations into personal protective equipment, medical consumables, and medical equipment.
Shares in Burnello Cucinelli tanked after a brief suspension following claims by short seller Morpheus Research that the fashion company was secretly operating stores in Russia despite EU sanctions.
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