European stocks open slightly higher, tracking Wall Street rebound

LONDON — European stocks opened slightly higher on Tuesday as regional markets tracked Wall Street’s rebound at the start of the week.

The pan-European Stoxx 600 was 0.14% higher shortly after the opening bell, with most sectors and major bourses in positive territory.

The moves come after major U.S. averages rebounded on Monday, driven by strength in the artificial intelligence trade and renewed hopes of a Federal Reserve interest rate cut. Asia-Pacific markets also traded higher overnight, boosted by Wall Street’s rally.

Traders continue to watch for any news that can affect the Fed’s upcoming monetary policy decision. Markets are pricing in a more than 80% chance of a quarter percentage point cut from the Fed in December, according to the CME FedWatch Tool.

The probability has risen since New York Fed President John Williams said last Friday that there was room to lower rates “in the near term.” San Francisco Fed President Mary Daly told the Wall Street Journal on Monday that she supports lowering rates due to labor market concerns.

In corporate news, Dutch lender ABN Amro announced Tuesday that it would cut 5,200 jobs by 2028 as it looks to streamline operations and reduce costs. The bank also said in the update ahead of its Capital Markets Day that it had agreed to sell its personal loans subsidiary Alfam to Rabobank. Shares of ABN Amro were last seen trading 3.7% higher.

Meanwhile, British budget airline easyJet reported stronger-than-expected operating profit for its fiscal full year on Tuesday. The company’s shares were 0.3% higher during early morning deals.  

Elsewhere, regional defense stocks have been volatile over the past week as the U.S. continues its push for progress on a peace deal for Ukraine. The sector staged a modest recovery on Tuesday, following two consecutive sessions of steep losses. Defense stocks posting the biggest gains in early trade included Germany’s Renk, up 5.2%, and Rheinmetall, up 2%.

On Monday, European Union leaders convened to discuss the 28-point peace plan that had initially been drafted by American and Russian officials, with no input from Ukraine or the rest of Europe. Under the preliminary draft, Ukraine would reportedly have had to make significant concessions to Russia — including giving away land occupied after the full-scale invasion, and downsizing its military — in order to end the war.

In a statement following the meeting, European Commission President Ursula von der Leyen said Europe held a central role in shaping Ukraine’s future.

“These are our core European principles moving forward: Ukraine’s territory and sovereignty must be respected,” she said. “Only Ukraine, as a sovereign country can make decisions regarding their armed forces, the choice of their destiny is in their own hands.”

She added that talks among the so-called Coalition of the Willing would continue on Tuesday.

Investors in the U.K. are also gearing up for the Autumn Budget on Wednesday, with a raft of tax hikes expected to be announced by U.K. Chancellor Rachel Reeves.

— CNBC’s Pia Singh contributed to this market report.