This is CNBC's live blog covering European markets.
European markets are expected to open in mixed territory Wednesday as global jitters over artificial intelligence tech rivalry between the U.S. and China eases.
The U.K.'s FTSE 100 index is expected to open 1 point higher at 8,538, Germany's DAX up 46 points at 21,490, France's CAC down 16 points at 7,897 and Italy's FTSE MIB up 74 points at 36,406, according to data from IG.
Earnings come from ASML and AkzoNobel and Sweden's Riksbank publishes its latest monetary policy decision later this morning. CNBC will be speaking to Christophe Fouquet, chief executive of Dutch chip equipment firm ASML on "Squawk Box Europe" just after 7 a.m. London time.
Other data releases include Germany's GfK consumer confidence, Spain's latest quarterly gross domestic product data and Italian business and consumer confidence data.
European stocks closed higher Tuesday, in the wake of a global market sell-off fueled by concerns over a potential AI breakthrough in China. The emergent and unexpected success of Chinese AI startup DeepSeek had sparked concerns over U.S. tech giants' global leadership.
Fed funds futures data reflect a nearly 100% certainty that the central bank will keep rates steady at a target range of 4.25% to 4.50%, according to CME Group data. Nonetheless, the decision, and Fed Chair Jerome Powell's press conference afterward, will be closely watched for more clues on the outlook for interest rates this year.
Broad stock market indexes would suffer in 2025 if Big Tech leaders continue to falter but the average stock is likely to "hold up well," according to Capital Economics senior markets economist James Reilly.
Although the S&P 500 Information Technology Index slid 5.5% Monday, its largest one-day decline since 2020, "the losses were largely confined to firms that had been expected to play a key role in facilitating AI, including semiconductor firms and utilities firms powering data centers," London-based Capital Economics said, noting the S&P 500 only fell 1.5% and roughly 70% of companies in the index rose.
One possibility is that investors will start to favor more of the users of artificial intelligence and fewer of the "enablers," which may have already begun before Monday, Reilly wrote. "In this scenario, the S&P 500 could rally further even as sentiment towards these prior favorites cooled. Indeed, something similar happened during the dotcom bubble -- there was a rotation within the I.T. sector (from the largest firms) around 1999/2000 that didn't undermine the S&P 500 index."
Strangely, the large share of the market accounted for by the 10 biggest stocks offers some hope. "That might mean that the losses as these gains unwound would be similarly concentrated, affording plenty of scope for the average firm in the S&P 500 to do well if the economic backdrop stayed positive, as we expect," Reilly noted.
-- Scott Schnipper
European markets are expected to open in mixed territory Wednesday.