FX.co ★ European Shares To Open Mostly Lower On Rate Worries, Gaza Ceasefire Uncertainty

European stocks are projected to have a rough start on Wednesday as the market reacts to the Federal Reserve's interest rate policy and the ongoing tension in the Middle East.

Traders are adjusting their interest rate cut predictions as the U.S dollar maintains its strength. Neel Kashkari, President of the Minneapolis Federal Reserve, informed on Tuesday that it is likely that the rates will remain high for an extended time. He added that he would advocate for an increase if inflation gets stuck close to 3 percent.

The market is also focusing on the situation in Gaza. Israeli forces took control of Gaza's crucial Rafah border crossing on Tuesday amidst continuous conversations about a captive exchange. The United States has minimized the severity of the Israeli attack on Rafah and indicated hope for a ceasefire agreement with Hamas.

Asian stocks dipped into negative territory, with Japan leading the regional declines following a substantial uptick in the preceding session. Meanwhile, gold saw a slight increase, while oil prices continued to drop as industry reports indicate an increase in U.S. reserves.

Economic news for the day includes Destatis releasing Germany's industrial production data for March. There's an anticipation for a 0.6 percent month-on-month reduction, a sharp contrast to February's 2.1 percent increase.

On the other hand, U.S. stocks ended almost unchanged after surrendering early gains as investors sought further clarity on the timing of the Federal Reserve's prospective interest rate cuts. The Dow managed to scrape through with minor gains, marking its fifth continuous session of improvement and achieving a one-month high.

The S&P 500 and the tech-heavy Nasdaq Composite marginally rose 0.1 percent and dropped 0.1 percent respectively. However, Tuesday saw the European stocks register a rise for the third consecutive session due to positive bank earnings and strong economic data. The German DAX, France's CAC 40, and U.K.'s FTSE 100 all experienced significant leaps, contributing to the 1.1 percent jump of the pan-European STOXX 600.