European stocks were mixed on Monday as traders awaited the US Federal Reserve meeting, the continuation of the corporate earnings season, and signs of a potential rapprochement between Washington and Beijing.
The pan-European STOXX 600 index settled at 576.12 points, the German DAX index rose 0.2% to 24,287.67 points, the British FTSE 100 index remained unchanged at 9,651.51 points, and the French CAC index fell by about 0.1% to 8,213.28 points.
European markets ended last week with gains driven by investors' reaction to the latest US inflation data, the only federal data released during the ongoing government shutdown, and to corporate earnings.
The annual inflation rate in the United States recorded 3% in September, a level lower than expected, which prompted a rise in US stocks amid expectations that the Federal Reserve will cut interest rates at its meeting this week.
The CME FedWatch tool shows that markets are pricing in a 96% probability of a 25 basis point rate cut this week.
Geopolitics and trade remain at the forefront of investors' minds this week amid hopes that the United States and China can resolve their escalating trade disputes.
US President Donald Trump and his Chinese counterpart, Xi Jinping, are scheduled to meet in South Korea on Thursday in an attempt to ease trade tensions. This meeting could provide investors with some clarity and reassurance. The meeting will take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, which is part of President Trump's Asian tour.
US Treasury Secretary Scott Besant said the talks between the two leaders were constructive, comprehensive, and in-depth, noting that they could lead to tangible progress in the negotiations.
This week in Europe, the results of Galp Energia and Deutsche Börse are among the headlines, along with the release of the German IFO Business Climate Index.
