European shares fell on Tuesday as investors turned cautious ahead of a speech by Federal Reserve Chair Jerome Powell after two US central bank policymakers struck hawkish tones overnight.

The pan-European STOXX 600 slid 0.7% by 0811 GMT.

The index had hit its highest level in eight months in the previous session. Powell’s speech later in the day was on investors’ radar after Fed policymakers said they expected the Fed policy rate — now at 4.25% to 4.5% — to need to rise to a 5%-5.25% to rein in inflation.

Rate-sensitive technology stocks dropped 1.0%, while pharmaceutical majors Novo Nordisk and Novartis AG dropped more than 1.5% each, weighing on the STOXX 600.

European shares rise on China reopening optimism

Miners fell 1%, tracking weak copper prices as investors gauged demand risks amid fears of further US rate hikes.

After a rough 2022, Europe’s STOXX 600 has risen 5.5% since the start of this year on growing hopes that the euro zone will get a milder-than-expected recession and central banks will ease their aggressive monetary policy tightening.

UK’s export-heavy FTSE 100 slipped 0.4%.

Britain announced plans on Monday to scale back energy subsidies for businesses for the next financial year by about 85%, after the government described the current level of support as “unsustainably expensive”.