U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng pose during U.S.-China trade and economic talks at Santa Cruz Palace, Spain’s main foreign ministry office, in Madrid, Spain, September 14, 2025.
United States Treasury | Via Reuters
LONDON — European stocks moved lower at the open on Tuesday, as investors assessed developments in the U.S.-China trade talks.
The pan-European Stoxx 600 was around 0.1% lower by 9:30 a.m. in London (4:30 a.m. ET), with most sectors in negative territory. All major regional bourses posted losses, with Germany’s DAX shedding 0.3% in morning trade.
Regional banking stocks fell on Tuesday morning, with the Euro Stoxx Banks index last seen 0.6% lower as investors awaited the U.S. Federal Reserve’s monetary policy decision.
The central bank’s Federal Open Market Committee will convene on Tuesday for a two-day meeting to decide whether to cut interest rates. Money markets are currently pricing in a 25-basis-point cut to the Fed’s key interest rate, according to the CME’s FedWatch tool.
Among the worst performers in the European banking sector on Tuesday were Germany’s Commerzbank, down 1.2%, Spanish lender Caixabank, down 1.2%, and Bank of Ireland Group, which fell 0.9%.
In the U.K., official data showed on Tuesday that the country’s unemployment rate held steady at 4.7% in July, remaining at the four-year high it hit in June.
Meanwhile, annual growth in average earnings — excluding bonuses — slowed to 4.8% in the three months to July, down from 5% in the previous three-month period.
“The headline unemployment rate, which held steady, masks a cooling trend that will be unsettling for many workers,” Danni Hewson, head of financial analysis at AJ Bell, said in a Tuesday morning note. She signaled that job openings were falling, while many businesses were delaying recruitment and investment decisions until November’s Autumn Budget.
“This trend will be closely watched by Bank of England rate setters,” Hewson added. “Although markets aren’t pricing in a cut this week, this softening opens up the potential for one more rate cut this year.”
The British pound was last seen 0.3% higher against the U.S. dollar, trading at around $1.363, while U.K. government borrowing costs ticked marginally higher.
Global markets are also keeping a close eye on talks in Spain after U.S. President Donald Trump said the U.S.-China trade negotiations were progressing well.
The U.K is meanwhile preparing for White House leader’s state visit. The U.S. president and his wife, Melania, arrive on Tuesday evening and will spend Wednesday at Windsor Castle with King Charles and Queen Camilla before holding talks with U.K. Prime Minister Keir Starmer on Thursday.