The Spanish stock index IBEX 35 opened Wednesday with a moderate advance after three sessions in negative territory, in a market that was digesting the latest comments of the Federal Reserve (Fed) chairman and was preparing for news on US inflation.

On the first day of his testimony before Congress, Jerome Powell said that a rate cut will not be appropriate until the Fed is "more confident" that inflation is heading towards the 2% target, although he highlighted the cooling of the labor market, a context that could pave the way for monetary easing.

"From his appearance, there is no change in expectations for rate cuts, noting that initiating cuts prematurely could reverse the progress made in moderating inflation," said analysts at Renta 4.

Investors will now look ahead to Powell's second day of testimony before lawmakers, as well as June CPI in the U.S. (Thursday), France and Spain (Friday), as they prepare for the second-quarter corporate earnings season.

At 07:05 GMT on Wednesday, Spain's selective IBEX 35 stock index was up 38.80 points, or 0.36%, to 10,937.60 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.17%.

In the banking sector, Santander rose 0.18%, BBVA gained 0.02%, Caixabank advanced 0.43%, Sabadell gained 0.38%, Bankinter gained 0.42%, and Unicaja Banco rose 0.47%.

Among the large non-financial stocks, Telefónica gained 0.97%, Inditex advanced 0.31%, Iberdrola showed little change, Cellnex gained 0.88%, and the oil company Repsol rose 0.22%.

Outside the IBEX 35, Puig stood out, rising 3% after it was announced that it will join the benchmark selective index on July 22, replacing Melia Hotels, which fell slightly more than 1.5%.

(Information by Tomás Cobos; edited by Javi West Larrañaga)