European Stocks Hold Steady Ahead of Fed Decision as Traders Watch for Policy Clues

European stocks remained stable ahead of the Federal Reserve's highly anticipated interest rate decision on Wednesday, as concerns grew that the global monetary easing cycle may be nearing its end.

The Stoxx Europe 600 index closed nearly flat, with banking and mining stocks leading gains, while automotive and utility sectors lagged. Roche Holding Ltd shares rose 2.1% after a study showed its experimental drug reduced the risk of aggressive recurrence in a type of breast cancer. Aegon NV dropped 10% after the Dutch insurer confirmed plans to relocate its headquarters to the U.S.

France's CAC 40 index declined 0.4% as the National Assembly passed next year's social security bill, averting another potential government crisis.

Among individual stocks, Abivax S.A. surged 9.5% amid growing speculation about a potential takeover of the biotech firm. Delivery Hero SE gained 14% after the food delivery company announced a strategic review under pressure from major shareholders.

European equities continue trading near November's record highs, though momentum has weakened amid concerns about the pace of global central bank easing. Traders grow increasingly uneasy about the Fed's future policy path after its near-certain rate cut on Wednesday.

Market pricing now implies almost no further rate cuts from the ECB, while traders bet Japan will almost certainly hike rates once this month and Australia will deliver two 25-basis-point increases next year.

"The key will be the Fed's forward guidance on future rate cuts, especially as we enter Jerome Powell's 'lame duck period' before the new Fed chair takes over," said Joachim Klement, strategist at Panmure Liberum.