Europe's STOXX 600 index opened higher and traded near record highs on Wednesday, as strong forecasts from Siemens Energy and US-based CoreWeave helped ease concerns about the outlook for artificial intelligence, while softer German inflation data lifted sentiment across the region.

The pan-European index gained 0.7% to 662.83 points by 0807 GMT, just short of the record levels reached in August. Sharecast reported the index up 0.66% at 662 by 0816 GMT, with all major bourses higher.

Siemens Energy and tech lead the advance

AI equipment maker Siemens Energy gained 6.5% on expectations of higher profit margins in 2027, after the German group more than tripled its dividend and pledged up to €9 billion in further share buybacks alongside record quarterly revenue.

Shares of its peers Schneider Electric and Legrand gained around 2.6% each, while the broader technology sector added 1.7%. The equity leaders board was dominated by technology heavyweights, with ATS, Soitec, Infineon, ASM International and BE Semiconductor all making strong gains.

Neocloud company CoreWeave said it would become profitable on an adjusted basis in the first half of 2028, a forecast that helped calm nerves after a recent sell-off in AI-related stocks.

Softer German inflation lifts sentiment

German inflation provided an early boost, with October consumer prices rising 2.8% year on year, down from 3.3% in September and below economists' forecasts of around 3.0% to 3.1%. The weaker-than-expected reading reinforced hopes that eurozone inflation pressures are easing, supporting expectations for a less restrictive interest-rate outlook.

Among the major markets, the Euro Stoxx gained 0.9% at the open, Germany's DAX rose 0.9% to move within striking distance of its record high around 26,692, France's CAC 40 added 0.6%, the UK's FTSE 100 climbed 0.7%, Spain's IBEX rose 0.3% and Italy's FTSE MIB gained 0.7%.

Vestas and CSG fall after disappointing updates

Not every stock shared in the rally. Wind turbine operator Vestas fell 6% after reporting third-quarter operating profit below market estimates, while Czech-based ammunition and arms producer CSG tumbled 18% after cutting its full-year operating margin forecast.

Brent crude made small gains to sit at around $92 a barrel, while West Texas Intermediate traded at $86.35, a day after shipping attacks in the Strait of Hormuz pushed oil prices up from two-month lows.

US inflation still hangs over markets

Investors largely shrugged off a weak session on Wall Street overnight, after hotter-than-expected US inflation data lifted expectations for a December interest rate rise by the Federal Reserve. The US consumer price index rose 0.4% month on month in October, slowing from September's 0.6% rise but coming in stronger than the 0.3% economists had expected. Core inflation, which strips out volatile food and energy costs, rose 0.3%, matching the pace seen in August and September.

Federal Reserve governor Christopher Waller signalled that further monetary tightening remains on the table, adding to the caution. With the US bond market closed on Wednesday for Veterans Day, traders will not get a full follow-up to the inflation data until Thursday at the earliest.

For now, European equities are holding their gains, and the question for investors is whether the STOXX 600 can break through its August record in the coming sessions, or whether inflation worries and uncertainty over US interest rates will keep a lid on the rally.