This is CNBC's live blog covering European markets.

European markets pivoted from the previous session's negative sentiment on Wednesday as global investors brace themselves for the U.S. Federal Reserve's latest monetary policy decision.

The pan-European Stoxx 600 index was up 0.3% at 3:40 p.m. London time, slightly trimming earlier gains. The benchmark index fell 1.2% yesterday to its lowest level in nearly a month, according to Reuters data.

UniCredit was up over 5% after it smashed analyst forecasts and raised its guidance for the year.

"I think it's a combination of a positive macro, probably better than we expected, and the fact that our continued transformation is probably boosting our results, and our lines of defense are keeping our cost of risk low," CEO Andrea Orcel told CNBC.

The European banking sector was choppy amid continued U.S. regional banking jitters. Investors also digested results from BNP Paribas, the euro zone's biggest bank, which moved between narrow losses and gains after reporting a doubling of profit in the first quarter. The U.K.'s Lloyds slipped 3.6% after it beat profit forecasts but warned it saw early signs of stress among some of its customers.

Oil and gas stocks extended Tuesday's sharp losses as oil prices fell further, declining another 0.9%.

Household goods stocks led gains, up 0.7%.

Asia-Pacific markets closed mostly lower, while on Wall Street, stocks were slightly higher in early U.S. trade.

Most economists surveyed by Reuters said they expect the Fed to hike rates by 25 basis points. The decision is due at 2 p.m. ET.

Strong travel season expected as China reopens: Trivago CEO

Axel Hefer, CEO of Trivago, discusses the latest company earnings and what he foresees for the upcoming travel season.

Pearson tops European stocks after investors rattled by Chegg's A.I. warning

British education resource provider Pearson topped Stoxx 600 gains in early afternoon trade, rising 8.4%.

Almost £1 billion ($1.25 billion) was wiped off Pearson's market valuation on Tuesday, with its share price down 15%, after the CEO of its U.S. rival Chegg warned in an earnings call that AI tool ChatGPT was impacting its new customer growth rate.

Chegg stock plunged by 48% following the comments, a reaction CEO Dan Rosensweig told CNBC was "extraordinarily overblown."

— Jenni Reid

UniCredit CEO says peak in net interest income approaching; deposits making 'flight to quality'

UniCredit CEO Andrea Orcel said in a Wednesday interview he believed the bank was "close to the peak in NII [net interest income]."

"We expect it some time between the second and the third quarter," Orcel told CNBC's Joumanna Bercetche, when asked about for the potential for the end of rate hikes and whether banks need to become more competitive on deposits.

"Rates need to still come up a little bit in Europe, or at least the ECB's determined to do that," he said.

But Orcel said UniCredit now believes its pass-through rate — the interest rate paid to investors on securitized assets minus fees — will rise less than it previously expected, which allowed it to raise its guidance in first-quarter earnings.

"That is due to volatility and risk. Our depositors, and depositors in general, are now rewarding stronger banks. There is a flight to quality," he said.

The bank had a pass-through rate of 20% last year when it expected 35-40%, and at the end of the first quarter was at 22%, Orcel said: "which means that depositors are staying with us even if we are a little bit less attractive because they are valuing the strength of the bank, the liquidity of the bank."

UniCredit shares were up 5.75% in early afternoon trade.

— Jenni Reid

Oil and gas stocks down 1% as crude prices extend losses

Oil and gas stocks were down 1.04% on the previous session at 10:42 a.m. London time.

BP, Shell and TotalEnergies were among the firms trading lower as Brent crude futures fell 2.06% to $73.78 a barrel, with West Texas Intermediate crude down 2.12% to $70.14 a barrel.

On Tuesday the benchmarks had their biggest one-day percentage fall since early January, according to Reuters data, hitting their lowest levels since late March.

— Jenni Reid

Stellantis down 2.1% after posting first-quarter results

Carmaker Stellantis posted a 14% annual rise in first-quarter net revenues as an easing of semiconductor supply chain pressures boosted shipments.

The Dutch-headquartered company recorded first-quarter net revenues of 47.2 billion euros ($52 billion). It also reaffirmed its full-year guidance; initiated a 1.5 billion euro share buyback; and confirmed an ordinary dividend of 1.34 euros per share will be paid to shareholders on Thursday.

Shares were down 2.06% at 9:53 a.m. London time.

— Jenni Reid, Elliot Smith

Kretschmer: EU chips act will allow Europe to regain competitiveness in the electronics market

Michael Kretschmer, the state premier of Saxony, says the EU can no longer focus only on its own internal market.

Stocks on the move: UniCredit up, BNP Paribas choppy

Shares of Milan-based UniCredit were up 6.6% at 8:47 a.m. London time as investors pored over its first-quarter results, which showed net revenue growth of 56.5% and an estimates beat on net interest income.

The bank also revised up its full-year guidance and raised the amount it expects to pay out to investors.

France's BNP Paribas moved from a narrow loss to a 0.25% gain following its own results, despite a doubling of year-on-year profit and outperformance in revenue.

BNP Paribas CFO Lars Machenil told CNBC the results showed a "solid balance sheet" and would form a bedrock for future growth.

The European banking sector climbed 1.06% despite Tuesday's sell-off of U.S. regional banks.

— Jenni Reid

UK regulator proposes London listing reform

Britain's stock market rules could be radically simplified as part of efforts to lure major company listings to London, under detailed plans unveiled by the country's financial watchdog.

The Financial Conduct Authority has proposed replacing Britain's existing 'premium' and 'standard' listing segments with a single category, as part of a package of reforms designed to simplify the country's listings rulebook.

"We want to encourage more companies to list and grow in the UK, versus other highly competitive international markets," said FCA chief executive Nikhil Rathi.

Read the full story here.

— Reuters

European consumer sentiment becoming more positive, says Pandora CEO

Danish jewelry maker Pandora reported sales growth of 1% in the first quarter, better than an analyst consensus of -1%, as its EBIT margin fell from 23% to 21.1%.

"If you consider the macro economic backdrop, the consumer sentiment, the recessionary fears ... we know that the jewelry market is actually in a negative place. Whereas we keep posting positive numbers. That's why we think it's a pretty good outcome," CEO Alexander Lacik told CNBC's "Squawk Box Europe."

Consumer sentiment was broadly unchanged from last year, he said, though Europeans were beginning to be more optimistic than U.S. shoppers.

"On balance, I think, what we are still looking at is a quite uncertain future," Lacik said.

— Jenni Reid

BNP Paribas doubles profit in first quarter

French bank BNP Paribas saw its profits more than double in the first quarter.

CNBC's Charlotte Reed speaks to BNP Paribas CFO Lars Machenil.

CNBC Pro: This global commercial real-estate stock is set to rise by 60%, Jefferies says

Jefferies expects shares of a global commercial real-estate stock to rise by more than 60% over the next 12 months.

The investment bank's prediction comes at a time when the global commercial real estate market has seen prices fall sharply over the past year.

However, the property firm is expected to escape the downturn as it nearly doubled the rent it charged its tenants, and office-space vacancy in the region it targets fell last year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

A mild recession won't trigger a quick Federal Reserve response, BofA says

Maybe Monday's stock market slide shows investors are finally tempering their optimism that the Federal Reserve will cut interest rates later this year to counterbalance an economic slowdown.

"[T]he markets may be too optimistic about how easy it is going to be to bring inflation back to target and will be surprised when the Fed does not cut rates in the face of a mild recession, Bank of America global economist Ethan Harris wrote in a note to clients before markets opened Monday.

Simply put, investors have bid up stocks since mid-March on a belief that the Fed will pivot policy, and cut rates by half a percentage point in reaction a shallow recession, BofA said.

Unfortunately, the bank says such hopes will be dashed. "We see four risks this summer: an ugly debt ceiling battle, a significant tightening of bank credit, a geo-political event and disappointingly hawkish central banks. The plan for many central banks, in our view, is to raise rates into modestly restrictive territory and then hold them there to finish the job of bringing inflation back to target. Hence a mild recession in the US—and flat growth in other major economies—will not trigger an immediate policy response," Harris wrote.

— Scott Schnipper

CNBC Pro: As lithium prices bounce, analysts love these stocks — giving one 155% upside

Prices of lithium, a key material used in electric vehicle batteries, have rebounded for the first time in months.

Analysts were generally bullish on the sector in the long term.

For investors looking to play the EV-related sector, CNBC screened for lithium and battery stocks with buy ratings from over 70% of analysts covering them, and average price target upside of at least 15%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

'March returns in May,' says Goldman Sachs

Goldman Sachs says investors haven't fully moved past March's bank crisis as banking stocks trade lower on Tuesday. The firm's analysts noted that following the failures of Silicon Valley Bank and Signature Bank in March, the market's worries were quickly alleviated by a deposit injection at First Republic Bank.

"Since bottoming out at 3808 on Mar. 13, the S&P 5000 gained almost 10% [as of] Monday night on the back of relaxed banks tensions, as well as a strong earnings season (so far) and a growing consensus that the Fed will soon pause its year-long rate hiking cycle," several Goldman analysts wrote in a Tuesday note.

"But today, we appear to be seeing some return of the March concerns following JPM's announced acquisition of FRC Monday. Regional bank stocks are down 4% to 13%. [Managing director Richard] Ramsden sees the JPM acquisition as accretive and points out that the transaction highlights that G-SIBs will be allowed to bid on FDIC transactions even if they are above the deposit cap," the note continued.

— Hakyung Kim

Former Fed official Rosengren advocates no rate hike

Eric Rosengren thinks his former colleagues at the Federal Reserve will be making a mistake if they raise interest rates again Wednesday.

The former Boston Fed president, who retired from the board in September 2021, told CNBC on Tuesday that turmoil in the banking industry and an economic slowdown should push policymakers to end the rate-hiking campaign that began in March 2022.

"My own view is that the economy is quite likely to slow down in the second half of the year and that it's not necessary at this point to be raising rates until we get a better view of what the second half of the year looks like," Rosengren said on "Squawk Box."

Traders in the futures market are pricing in a 96% chance that the Federal Open Market Committee approves a quarter percentage point rate hike when the two-day meeting ends, according to the CME Group's FedWatch tracker.

—Jeff Cox

European markets: Here are the opening calls

European markets are heading for a higher open Wednesday ahead of the U.S. Federal Reserve's monetary policy decision.

The U.K.'s FTSE 100 index is expected to open 22 points higher at 7,792, Germany's DAX 58 points higher at 15,771, France's CAC up 36 points at 7,408 and Italy's FTSE MIB 81 points higher at 26,501, according to data from IG.

Earnings are set to come from Lloyds Banking Group, Aston Martin Lagonda, BNP, Airbus, Stellantis, Deutsche Post DHL and Lufthansa. The unemployment reading for the euro zone in March is also due.

— Holly Ellyatt