This is CNBC's live blog covering European markets.

LONDON — European stock markets closed slightly lower on Wednesday as investors reacted to economic data from Germany and Spain.

The pan-European Stoxx 600 index ended down 0.2%, paring earlier gains. Sectors and major bourses were spread across positive and negative territory, with utilities down 1.9%, while media stocks rose 0.7%

Spain reported flash inflation up 2.6% year on year for August, in line with analyst expectations, while Germany reported a 13.2% drop in imports for the year to July, the sharpest drop since January 1987.

Markets closed higher Tuesday, tracking global counterparts as investors look ahead to a fresh round of economic data this week.

U.S. stocks were bolstered by tech gains on the back of chipmaker Nvidia announcing a partnership with Google.

Across the Atlantic, euro zone bond yields declined Tuesday following weak economic data out of the U.S., which supported expectations that the Federal Reserve may pause future interest rate hikes.

U.S. stocks ticked higher on Wednesday, marking the latest leg in an end-of-month rally as investors try to mitigate August's losses. Asia-Pacific markets mostly rose.

Trust ‘is still extremely strong’ in the Swiss financial sector despite Credit Suisse collapse: Patrick Odier

Patrick Odier, chair of Building Bridges and former senior managing partner of Lombard Odier, discusses the Swiss financial sector with CNBC.

Stocks on the move: Brunello Cucinelli up 6%, Delivery Hero down 7%

Italian fashion retailer Brunello Cucinelli topped the Stoxx 600 index, with company shares up more than 6% after reporting strong sales.

The fashion brand's revenues rose by 31% year-on-year in the first half of the year, and the company now projects a turnover growth of around 19% for 2023 as a whole.

Shares of Delivery Hero dropped more than 7% after the company reported a net loss of 832.3 million euros ($909 million) for the first half of 2023. The loss was smaller than over the same period in 2022, which totaled almost 1.5 billion euros, but one analyst told Reuters that the loss was expected to be narrower.

"Apparently, consensus looked for lower net losses," Alexander Zienkowicz, analyst at AlsterResearch, told Reuters.

— Hannah Ward-Glenton

Strategist backs defensives as data leans toward a slowing U.S. economy

Charu Chanana, market strategist at Saxo Capital Markets, shares her view on the latest U.S. economic data and how to position stock market allocations to best navigate the current uncertainty.

Lego sales increase while other toy makers struggle

While other toy companies struggle with an inflation-fueled sales slump, Lego is building positive results brick by brick.

The privately held Danish toymaker saw revenue rise 1% during the first six months of this year, reaching 27.4 billion Danish krone, or about $4 billion.

Meanwhile, publicly traded rivals such as Mattel, Hasbro, Funko and Jakks Pacific have all reported double-digit revenue and sales declines so far this year.

The full story is available here.

— Sarah Whitten

Spanish inflation figures still ‘a tough pill to swallow for consumers’: Verisk Maplecroft

Jimena Blanco, senior research director and chief analyst and Verisk Maplecroft, discusses Spanish inflation figures and the latest on the Spanish general elections.

Germany import prices show steepest drop since 1987

German import prices were down 13.2% in July 2023 from the same period last year — the largest annual decrease since January 1987, Germany's federal statistics office reported.

The decline was slightly more than the 13.1% forecast by analysts polled by Reuters.

Import prices are down mostly because of the big drop in energy prices after costs skyrocketed in 2022 following Russia's full-scale invasion of Ukraine.

— Hannah Ward-Glenton

Spanish flash inflation meets expectations with 2.6% uptick

Consumer prices in Spain rose 2.6% year on year for August, according to the country's National Statistic Institute.

The annual figure was higher than 2.3% in July, and was in line with forecasts made by analysts polled by Reuters.

Fuel prices are largely responsible for the increase since August 2022, the institute said, while electricity prices have risen month on month but at a slower rate than this time last year.

— Hannah Ward-Glenton

Offshore wind company Orsted drops more than 17% on delay forecasts

Shares of Danish offshore wind company Orsted slumped more than 17% in early trading after the developer said it expected impairments on its U.S. portfolio in a statement released late Tuesday.

Orsted listed projects affected by supplier delays and said there is a "continuously increasing risk" in suppliers' ability to deliver in line with their contracts. The delays would total an impairment of 5 billion Danish krona ($729 million) if there are "no further adverse developments" in supply chains, the company said.

Discussions with senior federal stakeholders are also not progressing as expected, Orsted said, and if efforts to qualify for additional tax credits prove unsuccessful, the company could lose around 6 billion krona.

— Hannah Ward-Glenton

European equity markets open higher

European stock markets opened higher Wednesday, reflecting moves on Wall Street overnight.

The pan-European Stoxx 600 index was up 0.2%, with most sectors trading in cautiously positive territory. Mining stocks made the biggest gains, with a 0.9% uptick, followed by insurance, which was up 0.6%. Utilities stocks shed 0.4% in early trade.

— Hannah Ward-Glenton

CNBC Pro: 'Pain trade': UBS CIO warns of bear trap as Chinese stocks rise

The recent rally in Chinese stocks could catch investors out, according to a UBS chief investment officer, who warned of a "pain trade."

Adrian Zuercher, a chief investment officer at UBS in the Asia-Pacific region, said this could lead to a "bear trap" — when traders open short positions, believing markets will fall, but are forced to close out these positions when markets rise.

Pro subscribers can read more here.

— Lucy Handley

U.S. Treasury yields fall as investors look ahead to key economic data

U.S. Treasury yields declined on Tuesday as investors braced themselves for a series of key economic data releases due this week that will shed light on the latest developments around inflation and the labor market, and could inform the Federal Reserve's next monetary policy moves.

At 4:30 am ET, the yield on the 10-year Treasury was down by more than two basis points to 4.1922%. The 2-year Treasury yield was last trading at 4.9979% after falling by over one basis point.

Yields and prices move in opposite directions and one basis point is equal to 0.01%.

— Sophie Kiderlin

CNBC Pro: Morgan Stanley's Slimmon says the S&P 500 will near 5,000 by year-end — and names 3 stocks to buy

Morgan Stanley Investment Management's Andrew Slimmon said he believes markets are set for a "strong rally" by the end of the year.

The managing director and senior portfolio manager at the firm told CNBC's "Street Signs Asia" on Tuesday that he believes the S&P 500 will be "closer" to 5,000 by then. If it reaches 5,000, that's an upside of nearly 13% from Monday's close of 4,433.

He named three stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are poised to open higher Wednesday, according to IG data. Britain's FTSE will move to 7,497.0 points, up 21.2, Germany's DAX is seen 53.5 points higher at 15,994.0, France's CAC is set for a 26.1-point uptick to 7,398.9, and Italy's FTSE MIB is forecast to jump 22 points to 28,672.

— Hannah Ward-Glenton