European Markets Slip as Investors Weigh Trade War Risks, Earnings Reports

European stock markets edged lower on Wednesday as investors digested corporate earnings, global trade tensions, and upcoming economic activity data from the region.

At 08:05 GMT (03:05 ET):

• Germany’s DAX fell 0.4%
• France’s CAC 40 declined 0.2%
• UK’s FTSE 100 slipped 0.1%

Trade War Fears Weigh on Sentiment

Market caution remains high following the U.S. imposing 10% tariffs on Chinese imports earlier this week. Concerns over a global trade war have intensified after U.S. President Donald Trump hinted that the European Union could be next to face new U.S. tariffs on EU exports.

Geopolitical uncertainty has added to investor anxiety, especially after Trump’s surprise remarks suggesting that the U.S. could take control of Gaza and transform it into a “Riviera of the Middle East”—a comment that drew sharp criticism from regional powers.

Corporate Earnings: Mixed Results Across Sectors

Investors are analyzing fresh corporate earnings reports, with key companies posting mixed results:

• Google-owner Alphabet (NASDAQ:GOOGL) disappointed, as it boosted capital expenditures, weighing on sentiment.
• Novo Nordisk (NYSE:NVO) projected slower 2025 sales growth compared to 2024, raising concerns over competition in the weight-loss drug market.
• Credit Agricole (OTC:CRARY) raised its dividend after strong retail banking performance lifted Q4 profits.
• Santander (BME:SAN) posted record annual profits for the third straight year, announcing a $10 billion share buyback plan.
• GSK (LON:GSK) beat Q4 earnings expectations, lifting its long-term sales forecast and announcing a $2 billion buyback.
• TotalEnergies (EPA:TTEF) increased its dividend payout to offset weak Q4 earnings, hit by lower oil prices and refining margins.
• Equinor (OL:EQNR) exceeded Q4 profit expectations, but signaled a pullback from renewable energy expansion in favor of higher oil and gas output.

Key Economic Data to Watch

• French industrial production fell 0.4% MoM in December, but the main focus remains on European services PMI data set to be released later today.
• The data will provide insight into the health of the region’s dominant services sector and broader economic momentum.

With trade war risks escalating and corporate earnings delivering mixed signals, investors remain cautious, closely monitoring any potential policy shifts from the U.S. and China’s next move.