European markets close slightly lower after ECB raises rates by 25 basis points

The euro ticked higher against the U.S. dollar on news of the European Central Bank raising interest rates by 25 basis points to 3.5%. The currency was up 0.4% to 1.0874 within half an hour of the announcement, after starting the day at 1.0828.

— Hannah Ward-Glenton

The European Central Bank raised interest rates by 25 basis points to 3.5%.

The increase is in line with expectations, as the bank continues to tackle sticky inflation across the euro zone.

Headline inflation expectations have also been revised, with the core figure now expected to average 5.4% in 2023, 3% in 2024 and 2.2% in 2025, according to Eurosystem data, meaning the central bank is now not expecting to reach its target rate of 2% before 2026.

— Hannah Ward-Glenton

HSBC downgraded U.K. markets to underweight from neutral, according to a note from the British bank.

Its analysts described the U.K. as "a drag" within Europe as its equities are under particular stress compared to other nations.

The FTSE 350 is among the worst-performing indexes in developed markets, HSBC wrote, and it expects earnings to decline by around 2% in 2023.

HSBC listed service sector inflation pressures, sticky core inflation and policy rates being far from their peak as reasons for the downgrade.

France and Spain were also downgraded by the bank (from overweight to underweight and from overweight to neutral respectively), while Switzerland and Sweden were upgraded (from underweight to overweight and from neutral to overweight respectively).

— CNBC's Michael Bloom contributed to this report.

"From my point of view … I think we do need a regulation and all the players, even the U.S. players, agree with that. I think we need a global regulation," French President Emmanuel Macron told CNBC's Karen Tso on the sidelines of the VivaTech conference in Paris.

Shares of H&M topped the Stoxx 600 index with a 6.7% uptick, despite weaker-than-expected second-quarter sales.

Net sales were up 6% for the second quarter, compared with the same period of the previous year, which the fashion group attributed to unfavorable weather conditions.

The Swedish company did say that June "has got off to a good start."

— Hannah Ward-Glenton

Siemens will spend 2 billion euros ($2.2 billion) on boosting its global growth, the company announced in a press release.

Investment will go toward new high-tech factories, innovation labs and education centers as the German manufacturing corporation aims to become a bigger player in digitalization, automation and sustainability.

Siemens will start with investments in Germany and the United States, and then look to expand its production and research and development capacities across Asia.

Shares of Siemens are up 0.2% after the announcement.

— Hannah Ward-Glenton

Markets rallied on the back of cooler inflation data released on Tuesday, with the S&P 500 and the Nasdaq reaching fresh 13-month highs.

Now, investors may be wondering if there will be a correction or if it's too late to get in on the action.

Andrew Slimmon of Morgan Stanley Investment Management shares his view and names stocks to buy right now.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Click here to see a comparison of the June Fed statement with May's.

— Alex Harring

The S&P 500 and the Nasdaq Composite shed earlier gains and turned negative shortly after the central bank indicated that though it was pausing on a June hike, the "dot plot" showed two more increases are coming.

The S&P 500 dropped 0.6%, while the Nasdaq fell 0.7%. The Dow Jones Industrial Average lost more than 400 points, or about 1.2%.

-Darla Mercado

Apple and Meta are banking on virtual reality technology to be the next big thing in consumer electronics, but the jury appears to be still out on which company has the right strategy.

Apple's recent announcement of its Vision Pro headset, priced at $3,499, has drawn its fair share of criticism, but Andrew Uerkwitz, an equity analyst at Jefferies, does not see the hefty sum as a misstep.

Meanwhile, DA Davidson's Tom Forte Meta Platforms' Quest 3 benefiting from the momentum driven by Apple.

CNBC Pro subscribers can read more here.

— Ganesh Rao

European markets are heading for a flat open Tuesday.

The U.K.'s FTSE 100 index is expected to open 5 points lower at 7,580, Germany's DAX 3 points lower at 16,190, France's CAC 3 points lower at 7,301 and Italy's FTSE MIB 37 points lower at 27,835 according to data from IG.

Data releases include euro zone current account figures for April.

— Holly Ellyatt