Tech stocks lift Europe's STOXX 600 to record high; Fed in focus

By Nikhil Sharma and Johann M Cherian

(Reuters) -European shares closed at a record high on Wednesday, boosted by technology stocks following strong results from chip equipment maker ASML, while investors shifted their focus to a monetary policy verdict by the U.S. Federal Reserve.

The pan-European STOXX 600 was up 0.5%, logging its biggest one-day jump in more than one week. The technology sector led gains with a 2.5% jump, making it the biggest daily rise in three weeks.

ASML jumped 5.6% after the Dutch company reported better-than-expected fourth-quarter bookings of 7.09 billion euros ($7.39 billion).

The chip equipment maker's earnings also reassured investors that AI chip prospects were still healthy, as they recovered from a selloff earlier this week sparked by the release of China's DeepSeek's model, which uses less computing power than those of rivals.

Other semiconductor stocks STMicroelectronics , BE Semiconductor and ASM International gained between 0.8% and 3.1%.

Other AI-exposed stocks such as Schneider Electric and Siemens Energy, which took a hit on Monday, were trading 4.7% and 4.9% higher, respectively.

Focus is now on the Fed's monetary policy decision, due at 1900 GMT. The U.S. central bank is expected to keep policy rates unchanged and investors will be keen on Chair Jerome Powell's comments on the outlook on interest rates this year.

On Thursday, the European Central Bank is expected to cut rates by 25 basis points.

"With (U.S. President Donald Trump) back in the spotlight and the complexities of setting monetary policy in the face of potential tariffs, (ECB-POLICY-SOURCES-e4bab80d-7aeb-4e49-a29a-ce14e1595c6d>ECB-POLICY-KAZIMIR-00b06d9b-4b99-46ce-a2aa-458d8eb2d993>ECB-POLICY-SOURCES-e4bab80d-7aeb-4e49-a29a-ce14e1595c6d>ECB President Christine) Lagarde's press conference will be a must-watch as she tackles the challenge of delivering a clear message on the outlook in these politically charged times," said Neil Hutchison, European liquidity strategies portfolio manager at J.P. Morgan Asset Management.

Meanwhile, Germany's DAX added 0.9% to close at a record high, boosted by a 4.5% jump in Deutsche Telekom after U.S. peer T-Mobile issued a robust subscriber growth forecast.

Swedish truck maker Volvo jumped 7.7% after reporting strong orders for the fourth quarter.

Limiting gains, LVMH fell 4.9% as the luxury goods group's sales growth failed to impress investors following a string of strong results from rivals and recent price gains.

Rivals Kering and Christian Dior also declined about 5% respectively. The French benchmark CAC 40 index was the only benchmark among major EU economies in the red.

Sweden's SEB fell 4.2% after narrowly missing quarterly net profit expectations and proposed a lower-than-expected total dividend for the year.

Spain's IBEX index rose 1% to hit a more than 16-year high after data showed the economy expanded a stronger-than-expected 3.2% in 2024.

(Reporting by Nikhil Sharma and Johann M Cherian; Editing by Rashmi Aich, Varun H K and Maju Samuel)