European shares ticked higher on Tuesday, buoyed by optimism that a potential trade standoff with the United States may be defused through dialogue. The pan-European STOXX 600 index rose 0.2% to 547.74 points, with gains led by automobile and technology stocks.
The rebound in sentiment followed comments from U.S. President Donald Trump, who hinted at a willingness to negotiate tariffs with the European Union (EU). This comes after a weekend of escalated rhetoric, where Trump threatened to impose 30% tariffs on most EU imports beginning August 1.
In contrast, the EU had accused Washington of stalling trade talks and warned of potential retaliatory tariffs. However, the news that EU officials are expected to visit the U.S. for trade discussions helped ease market concerns.
Sector Performance
In sectoral moves:
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Automobile stocks surged 0.9%, recovering from recent losses.
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Technology stocks advanced 0.8%, reflecting global tech optimism.
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Telecoms lagged behind, dropping 0.8%.
Among individual stocks, Orsted, the Danish offshore wind developer, gained 5.5% after Morgan Stanley upgraded the stock to “Overweight” from “Equal Weight”, citing strong growth potential.
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What’s Next?
Investors are now turning their attention to key economic indicators and earnings:
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Eurozone industrial production data for May and Germany’s ZEW Economic Sentiment Index for July are due later today.
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In the U.S., the Q2 earnings season kicks off with reports from major banks.
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Markets also await U.S. inflation data, which could shape expectations around Federal Reserve policy and interest rate trajectory.
Despite recent tensions, hopes of diplomacy have sparked renewed interest in European equities, particularly in cyclical sectors tied closely to global trade.