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European markets are set to open broadly higher on Wednesday, extending the week’s upward momentum as investors grow increasingly confident that the U.S. government shutdown impasse will soon end. Optimism in global equities is being bolstered by easing political tensions in Washington, a robust earnings season across Europe, and resilient economic indicators in both the U.S. and Asia.

According to early data from IG, Germany’s DAX is expected to rise 0.4%, France’s CAC 40 up 0.25%, and Italy’s FTSE MIB up around 0.22%, while the U.K.’s FTSE 100 is seen opening flat after modest gains earlier in the week.

U.S. Political Developments and Market Reaction

In the United States, the Senate passed a critical spending bill on Monday evening aimed at reopening the government after weeks of partial shutdown. The legislation has now moved to the House of Representatives, where a final vote is anticipated later this week. If approved, the move would avert further economic disruptions and restore confidence among global investors wary of political gridlock in Washington.

Wall Street ended Tuesday’s session mixed, with the S&P 500 finishing slightly lower by 0.1%, the Dow Jones Industrial Average gaining 0.2%, and the Nasdaq Composite slipping 0.3% as traders rotated out of major tech stocks into defensive sectors like utilities and consumer staples.

Earnings Season in Focus Across Europe

Investors in Europe are watching a packed day of earnings releases from some of the region’s biggest names. Reports are expected from Infineon Technologies, E.ON, Experian, Alcon, RWE, Bayer, Swiss Life, Poste Italiane, SSE, and ABN Amro.

Market participants are particularly attentive to the energy and financial sectors, which have shown resilience despite a slowdown in manufacturing activity across the eurozone. Analysts forecast Infineon to report solid growth in semiconductor demand, while RWE and SSE are expected to benefit from higher wholesale energy prices during the third quarter.

Asian Markets Mixed Amid SoftBank Sell-Off

In Asia, sentiment was mixed after SoftBank Group shares plunged nearly 10% in Tokyo trading. The Japanese investment giant revealed that it had sold its entire $5.83 billion stake in U.S. chipmaker Nvidia, offloading 32.1 million shares in October. The firm also reduced its holdings in T-Mobile, raising a total of $9.17 billion in fresh capital.

Despite the sell-off, broader Asian indices remained stable. Japan’s Nikkei 225 edged down 0.3%, while Hong Kong’s Hang Seng Index gained 0.6% and South Korea’s Kospi rose 0.4%, buoyed by strong export data and easing inflation concerns in the region.

Investors Remain Cautiously Optimistic

While fears of a potential market bubble in U.S. technology stocks persist, investor sentiment has become more discerning. Traders are now differentiating between firms with genuine long-term advantages in the AI and semiconductor sectors and those riding short-term hype.

As markets digest the latest economic and political developments, analysts suggest that Europe’s near-term trajectory will depend heavily on U.S. fiscal stability, upcoming inflation data, and the tone of corporate guidance from major European firms. For now, the global equity landscape appears cautiously optimistic, with investors betting that policy clarity and steady earnings will sustain the current rally through the end of the week.