Mixed European stocks on earnings and inflation data

What happened: European stocks closed mixed on Wednesday as investors parsed regional economic data and awaited the Federal Reserve's monetary policy decision. The pan-European Stoxx 600 index ended flat, with sectors swinging between gains and losses. The German DAX hit a record high despite July's consumer price index jumping to 2.8%. Meanwhile, tech stocks drifted lower due to geopolitical concerns, with the sector closing 0.7% lower.

Market impact: The mixed performance was driven by a combination of factors. Positive earnings updates and record highs in the German DAX boosted investor sentiment, while geopolitical tensions, particularly in the Middle East, pushed up oil prices, raising inflation and interest rate concerns. Tech stocks, which had been on a tear, retraced some of their gains due to valuation concerns and skepticism around AI infrastructure spending.

What to watch next: Investors will be closely watching the U.S. inflation data due on Wednesday, which is expected to provide clues about the pace of the Federal Reserve's policy tightening moves. Additionally, the earnings season continues with several major companies reporting this week, including SAP and Volkswagen. Lastly, the developments around the Russia-Ukraine conflict will continue to influence market sentiment.