Wind power firms Vestas and Orsted jump on U.S. bill update

European markets open higher

European stock markets moved higher in early Wednesday deals, with the Stoxx 600 index up 0.35% shortly after the open.

Mining and banking stocks are leading gains, both up around 1.2%.

Danish wind turbine makers Vestas and Orsted have jumped 8.4% and 5%, respectively, as investors take in what the latest text of the U.S. One Big Beautiful Bill Act means for the renewables sector.

Analysts at Citi said the version that passed in the Senate on Tuesday “provides significant relief for wind.” An earlier draft drove down Vestas shares on Monday.

UK government passes welfare bill as IFS says tax rises now more likely

In overnight news from the U.K., Prime Minister Keir Starmer secured parliamentary support for his controversial welfare bill — but only after a last-minute climbdown and ditching key elements including plans to tighten eligibility criteria for welfare benefits.

The U-turn managed to stave off a larger-scale rebellion among his Labour party, though 49 of its MPs still voted against the bill.

In their original form, the government had estimated the reforms would cut £5 billion ($5.86 billion) from the welfare budget by the 2029-30 fiscal year, when the government's self-imposed rules require it to run a balanced day-to-day budget.

Now, the Resolution Foundation think tank estimates the bill will cost the government around £200 million annually by that point, adding more pressure on Finance Minister Rachel Reeves to implement tax rises or spending cuts in her fall budget.

The Institute for Fiscal Studies meanwhile noted that the government's failure to find any savings on benefits payments had effectively halved Reeves' margin of error against her main fiscal target in the budget.

“Since departmental spending plans are now effectively locked in, and the government has already had to row back on planned cuts to pensioner benefits and working-age benefits, tax rises would look increasingly likely. This will doubtless intensify the speculation over the summer about which taxes may rise and by how much,” Helen Miller, deputy director at the IFS, said.

What's coming up for markets on Wednesday

European traders will be keeping an eye on more action from the European Central Bank forum in Sintra, Portugal, on Wednesday, with ECB President Christine Lagarde due to address policymakers today.

CNBC has interviewed a number of central bank governors and officials at the forum, including ECB Chief Economist Philip Lane, Portugal's central bank Governor Mario Centeno and Bank of England Governor Andrew Bailey.

It's widely expected that the ECB will lower its key rate, the deposit facility rate, in September, after data released Tuesday showed the euro zone inflation rate hit the central bank's 2% target.

On the data front, unemployment figures are due from Spain, Italy and the wider European region.

There are no major earnings reports in Europe on Wednesday.

Here are the opening calls

Welcome to CNBC's live blog covering all the action in European financial markets on Wednesday, as well as the latest regional and global business news, data and earnings.

Futures data from IG suggests European markets will open higher, with London's FTSE looking set to open 0.2% higher at 8,804, Germany's DAX 0.4% higher at 23,803, France's CAC 40 up 0.5% at 7,702 and Italy's FTSE MIB up 0.6% at 39,841.

The positive start expected in Europe comes as global markets assess the status of trade talks and the prospect of deals before U.S. President Donald Trump's 90-day reprieve from higher import duties expires on July 9.

Traders are also digesting the latest comments from U.S. Federal Reserve Chair Jerome Powell, who said the central bank would have already cut interest rates if it weren't for U.S. President Donald Trump's tariff initiatives. Trump has repeatedly criticized Powell for the central bank's rate policy.

U.S. stock futures were little changed overnight, after investors began the second half with a reduced appetite for technology stocks. Singapore stocks hit a record high overnight amid mixed trading in the Asia-Pacific region.