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At 03:50 ET (07:50 GMT), the DAX index in Germany traded 0.1% lower, while the CAC 40 in France climbed 0.1% and the FTSE 100 in the U.K. traded 0.1% higher.
Trading is taking places in tight ranges Tuesday as investors cautiously await news from Washington as Federal Reserve policymakers begin discussing their response to the U.S. economic outlook.
The U.S. central bank is widely expected to keep interest rates steady at a range of 5.25% to 5.50% when the meeting concludes on Wednesday, after raising them at 11 of its past 12 meetings in a bid to cool inflation.
But markets are not in full agreement whether the Fed will be done as of now or whether it will raise rates one more time this year, as inflation still remains above its 2% target.
Back in Europe, the eurozone’s final inflation figures for August are due later in the session, and are expected to confirm that CPI rose 0.6% on the month, a rise of 5.3% on an annual basis.
This is still substantially above the European Central Bank’s 2% medium term inflation target, hence the central bank’s interest rate hike last week. But core inflation, which excludes volatile energy and food prices, is seen falling to 5.3% from 5.5% annually.
The ECB raised its deposit rate to a record high 4% last week but also hinted at a pause in its rate-hiking cycle as the policymakers assess the impact of the numerous interest rate increases on the region’s economy.
Officials will need until March to be sure that last week’s rise was the last and further rate hikes cannot yet be ruled out, Slovak policymaker Peter Kazimir said on Monday.
In the corporate sector, Kingfisher (LON:KGF) stock fell almost 6% after the DIY chain issued a profit warning, citing disappointing results from its French and Polish businesses.
Ocado (LON:OCDO) stock rose 3% after the online grocer posted a sharp rise in sales from its retail arm, and opened its new Luton distribution centre, aimed at cutting costs of its operation.
Naked Wines (LON:WINEW) stock slumped 8.6% after the online wine retailer posted a hefty loss and warned of its to it continuing as a going concern.
Oil prices continued to power ahead Tuesday, rising for the fourth consecutive session, on further supply concerns following the release of a weak U.S. shale production forecast.
U.S. oil output from top shale-producing regions is on track to fall for a third month in a row in October to the lowest level since May 2023, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday.
This has added to worries of a substantial supply deficit this year stemming from extended production cuts by Saudi Arabia and Russia.
By 03:50 ET, the U.S. crude futures traded 0.7% higher at $91.23 a barrel, while the Brent contract climbed 0.5% to $94.90.
Prices have gained for three consecutive weeks, and are now around 10-month highs for both benchmarks.
Additionally, gold futures rose 0.1% to $1,955.55/oz, while EUR/USD traded 0.1% lower at 1.0682.
