Europe set for dour open as markets shrug off Wall Street rebound

LONDON — European stocks are expected to open flat to lower on Tuesday as regional markets shrugged off Wall Street’s rebound at the start of the week.

The U.K.’s FTSE index is seen opening slightly lower, Germany’s DAX down 0.2%, France’s CAC 40down 0.42% and Italy’s FTSE MIB unchanged, according to data from IG.

The dour open expected in Europe comes 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 theCMEFedWatchTool.

The probability has risen since New York Fed PresidentJohn Williams said last Friday that there wasroom to lower rates “in the near term.”San Francisco Fed PresidentMary Dalytold the Wall Street Journal on Monday that shesupports lowering ratesdue to labor market concerns.

In Europe on Tuesday, earnings come from Compass Group, Easyjet and Kingfisher while data releases include German GDP and French consumer confidence.

Investors in the U.K. are 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.