Investing.com – European Stock Markets Cautiously Higher

European stock markets edged cautiously higher on Wednesday, with investors wary about the possibility of a wider war in the Middle East while awaiting fresh regional employment data.

At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.1% higher, the CAC 40 in France rose 0.3%, and the FTSE 100 in the U.K. climbed 0.3%.

Middle East Conflict Escalates

European stock markets received a negative handover from Wall Street after troubles in the Middle East escalated, with Iran launching ballistic missiles at Israel in retaliation for the killing of Iran-backed Hezbollah leader Hassan Nasrallah and Israel’s deployment of ground forces into southern Lebanon.

Iran has stated that the attack is over barring further provocation, but Israel vowed to respond, potentially dragging the United States, its backer, into the turmoil.

Eurozone Unemployment Data, ECB Speakers Due

Back in Europe, investors will digest more unemployment data and comments from several ECB speakers, including Vice President Luis de Guindos and chief economist Philip Lane. The eurozone unemployment rate is expected to remain at 6.4% in August. With the region’s inflation rate falling below the European Central Bank’s 2% target, a quarter-point rate cut later this month seems almost assured.

Citigroup noted that it expects the ECB to cut interest rates by 25 basis points in its October 17 meeting, with further cuts expected in December and into 2025, potentially lowering the policy rate to 1.5% by September 2025.

Nike Withdraws Revenue Forecast

In the corporate sector, JD Sports Fashion (LON:JD) stock fell 3% despite beating the consensus forecast for first-half profit and maintaining annual guidance. Conversely, Nike (NYSE:NKE) faced significant negative news as it withdrew its annual revenue forecast and postponed its investor day just as a new CEO is about to take charge.

Crude Soars on Middle East Violence

Oil prices rose on Wednesday, continuing the previous session’s sharp gains as escalating tensions in the Middle East raised concerns over potential disruptions to crude output from the oil-rich region. By 03:05 ET, the Brent contract climbed 1.5% to $74.62 per barrel, while U.S. crude futures (WTI) traded 1.7% higher at $71.04 per barrel. Both benchmarks surged more than 5% on Tuesday after Iran fired missiles at Israel.

Additionally, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are set to meet later, but no changes to output are expected at this time. U.S. crude inventories fell by about 1.46 million barrels for the week ending September 27, compared to expected declines of about 2.1 million barrels, according to the American Petroleum Institute. The official government inventory report is due later in the session.