European markets kicked off the week on a cautious note, with investors keeping a close watch on geopolitics, central bank policy, and corporate movers.
Today, Monday, August 18, 2025, the pan-European STOXX 600 index was little changed, trading flat around 0840 GMT after notching two straight weeks of gains.
The spotlight is firmly on Ukraine peace talks, where European leaders are set to meet U.S. President Donald Trump following his summit with Russia’s Vladimir Putin last Friday. While no ceasefire or concrete deal was reached, both sides agreed that peace negotiations should continue.
For markets, the details of the deal aren’t as crucial as the end of the war itself. Robert Schramm-Fuchs, a portfolio manager at Janus Henderson, explained:
“The main thing for the European stock market would be any peace agreement and the exact shape doesn’t matter so much. It’s more about ending the war, which will bring some lost valuation back to the European market.”
Since Russia’s invasion in 2022, European equities have significantly lagged behind U.S. counterparts. Any breakthrough in talks could help narrow that gap.
Germany’s foreign minister has already called for more aid to Ukraine and stronger pressure on Moscow ahead of the Trump–EU meeting. Ukrainian President Volodymyr Zelenskiy is expected to be at the table as well.
While geopolitics dominate headlines, investors are also bracing for a big week in the U.S. Federal Reserve’s Jackson Hole symposium kicks off later this week, where Fed Chair Jerome Powell and other policymakers will give fresh signals on the economic outlook and future interest rate moves.
With global markets so sensitive to U.S. monetary policy, Powell’s tone could easily swing sentiment on both Wall Street and European exchanges.
Despite the flat market overall, individual stocks made sharp moves.
Vestas Wind Systems (VWS.CO) soared 16.4%, topping the STOXX 600, after the U.S. Treasury provided long-awaited clarity on wind and solar subsidy rules that extend through 2030.
Other renewable energy stocks followed suit, with EDP Renovaveis jumping 6.7%, and both Orsted and RWE climbing more than 2%.
Novo Nordisk (NOVOb.CO) gained 4.5% after the U.S. FDA granted accelerated approval for its blockbuster weight-loss drug Wegovy, now cleared to treat a serious liver condition.
On the downside, Commerzbank slid 3.7% after Deutsche Bank downgraded the stock to “Hold” from “Buy.” Euro zone banks overall lost about 1.5%, snapping a strong rally that has seen the sector surge nearly 60% so far this year.
