(fxcue news) - European stocks are seen opening on a sluggish note Wednesday as enthusiasm for China's economic stimulus began to wane and new data indicated that the U.S. economy could be slowing down. Rising risks of a wider Middle East war may also keep investors on the sidelines after Israeli defense forces killed the head of Hezbollah's rocket and missile division, Ibrahim Qubaisi, in a strike in the Dahiyeh suburb of Beirut on Tuesday. Asian stocks were muted, although Chinese and Hong Kong markets extended their previous session's rally sparked by support measures unveiled by Chinese authorities. Treasury yields were little changed after the release of weak U.S. data and a decent auction of U.S. two-year notes. A weaker dollar on hopes of further interest rate cuts lifted gold prices to a record high while oil edged lower after rising the day before. Fed Governor Michelle Bowman said Tuesday that inflationary risks remain and the Fed should lower interest rates at a "measured" pace. She noted that lowering rates too quickly risks unleashing pent-up demand and cash, which would send inflation upward again. Her comments stand in contrast to commentary from a handful of other policymakers who saw scope for further easing. Closer home, Sweden's Riksbank is widely expected to cut rates by 25 basis points later in the day. Reports on French consumer confidence and unemployment along with remarks by ECB's Elizabeth McCaul and the Bank of England's Megan Greene could influence markets as the day progresses. U.S. stocks closed higher on Tuesday after a somewhat choppy ride as a measure of consumer confidence unexpectedly fell the most in three years. House-price growth slowed in July but still reached another all-time high, while factory activity slumped more sharply in the mid-Atlantic region this month, separate set of data revealed. The Dow edged up 0.2 percent, the S&P 500 added 0.3 percent and the the-heavy Nasdaq Composite advanced 0.6 percent. European stocks advanced on Tuesday after China's central bank unveiled its biggest stimulus since the pandemic. The pan European STOXX 600 jumped 0.7 percent despite German business sentiment deteriorating more than expected in September and falling for a fourth consecutive month. The German DAX gained 0.8 percent, France's CAC 40 rallied 1.3 percent and the U.K.'s FTSE 100 inched up 0.3 percent.