European Markets Rally Post-PCE Data: Key Takeaways from September 2025
- How Did Major European Indices Perform?
- What's the Significance of the PCE Data?
- Which Stocks Made Notable Moves?
- What's Behind the Consumer Sentiment Drop?
- How Did Other Economic Indicators Shape Up?
- What Were the Biggest Corporate Stories?
- How Does This Week Set Up October Trading?
- Frequently Asked Questions
European equities closed the week on a high note as investors digested a mix of U.S. economic data and corporate moves. The headline PCE inflation reading matched expectations at 2.7% annually, while consumer sentiment dipped unexpectedly. Meanwhile, Prosus made waves with its billion-euro acquisition in France, and Alten surprised markets despite weak earnings. Here's your DEEP dive into what moved markets this week.
How Did Major European Indices Perform?
The CAC 40 climbed 0.97% to 7,870 points, mirroring the EuroStoxx50's identical percentage gain to 5,497 points. This rebound came despite ongoing trade tensions sparked by former President Trump's latest policy announcements. TradingView data shows these gains partially offset losses from earlier in September, when markets reacted to Fed rate hike speculation.
What's the Significance of the PCE Data?
The Personal Consumption Expenditures (PCE) index - the Fed's preferred inflation gauge - rose 2.7% year-over-year in August, matching consensus estimates. Core PCE (excluding food and energy) held steady at 2.9%. Monthly figures showed a 0.3% increase, slightly above July's 0.2% pace. As BTCC analyst Mark Williams notes, "These numbers keep the Fed on track for gradual tightening, though the consumer sentiment drop adds complexity."
Which Stocks Made Notable Moves?
Engineering firm Alten (+1.05% to €67.25) defied expectations after reporting a 21.9% drop in operating profit to €124.7 million. Its workforce shrank from 58,300 to 57,900. Meanwhile, Prosus gained 0.71% (€58.40) after announcing its €1.1 billion purchase of French auto marketplace La Centrale - a strategic MOVE into European auto e-commerce.
What's Behind the Consumer Sentiment Drop?
The University of Michigan's consumer confidence index plunged to 55.1 in September - its lowest since May 2025. This surprised economists who expected 55.4 after August's 58.2 reading. The decline affected all demographic groups, potentially signaling trouble for holiday spending.
How Did Other Economic Indicators Shape Up?
U.S. household income grew 0.4% in August, beating the 0.3% forecast, while spending increased 0.6% (versus 0.5% expected). The euro closed at $1.1693, down 0.40%. As one London trader joked, "The euro's still trying to figure out if it wants to be a currency or a rollercoaster."
What Were the Biggest Corporate Stories?
Beyond Prosus' acquisition, TP plunged 2.56% to €62.36 after U.S. rival Concentrix issued disappointing guidance. The tech sector remains volatile as companies adjust to higher interest rates and shifting consumer behavior post-pandemic.
How Does This Week Set Up October Trading?
With inflation data now priced in, markets will focus on upcoming earnings and central bank commentary. The PCE numbers suggest the Fed won't accelerate tightening, but weak sentiment could foreshadow economic slowing. As always in European markets, geopolitics and energy prices remain wild cards.
Frequently Asked Questions
Why is the PCE index important?
The Federal Reserve prefers PCE over CPI as it better reflects consumer behavior and includes a broader range of expenditures.
What does Prosus' acquisition mean for European e-commerce?
The La Centrale purchase positions Prosus to compete in Europe's growing online auto market, complementing its food delivery investments.
How reliable is the consumer sentiment index?
While volatile month-to-month, sustained drops often precede spending pullbacks - hence why markets watch it closely.
