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European shares rose modestly on Tuesday, bouncing back from a sharp four-day selloff that pushed markets to 14-month lows. While the rebound brought some relief, investor sentiment remained highly sensitive to ongoing developments in the global trade conflict sparked by U.S. President Donald Trump’s sweeping tariff policy.
As of 07:48 GMT, the pan-European STOXX 600 was up 1.1%, following a steep 12.1% decline over the previous four sessions. The index had fallen 17.9% from its all-time high reached on March 3, amid growing fears of a global recession.
Germany’s benchmark index also gained 1.1%, after narrowly avoiding a formal bear market confirmation in the previous session.
Defence Stocks Lead Gains; Tech and Banks Recover
Investors rotated back into defence-related stocks, this year’s best-performing sector, pushing the segment up 3.3%. Meanwhile, European lenders, which have suffered from slowing growth fears, rose around 1% as risk appetite cautiously returned.
Notable gainers included:
- ASML (AS:ASML), the Dutch semiconductor equipment maker, which rose 3.9%
- Siemens (ETR:SIEGn), the German engineering giant, up 3.6%
Both stocks offered substantial support to the broader STOXX 600 index.
Trade Tensions Continue to Dominate Market Sentiment
Despite the rebound, the broader backdrop remains tense. China has refused to yield to what it calls U.S. “blackmail,” as the global trade war intensifies with little indication of a de-escalation.
In response, the European Commission on Monday proposed 25% counter-tariffs on a range of U.S. goods. The EU is already grappling with existing U.S. tariffs on automobiles and metals, and faces an additional 20% levy on other goods set to take effect Wednesday.
EU finance ministers are expected to meet later this week to discuss a strategy to mitigate the economic impact of the U.S. trade measures, which analysts warn could derail the region’s already fragile recovery.
Uncertainty remains high, with investors and policymakers unsure whether Trump’s tariffs represent a permanent stance or a negotiating tactic aimed at extracting trade concessions.
Wall Street Shows Volatility, Investors Remain on Edge
On Monday, U.S. markets ended mixed, after a volatile session triggered by conflicting headlines. An erroneous report suggesting a temporary suspension of tariffs caused a sharp 5.6% surge in the S&P 500, which quickly faded after being corrected.
The wild intraday swings underscored how hypersensitive markets have become to trade-related news, with even rumors having the power to trigger sharp moves in either direction.
Company News: Infineon Slips on Acquisition News
In corporate headlines, German chipmaker Infineon Technologies (OTC:IFNNY) slipped 0.9% after announcing it would acquire Marvell Technology’s (NASDAQ:MRVL) automotive ethernet business for $2.5 billion in cash. The move is aimed at strengthening Infineon’s position in the automotive microcontroller segment but drew a muted response from investors amid broader sector volatility.
While Tuesday’s gains offered some breathing room for European markets, uncertainty surrounding global trade policy continues to weigh heavily, and any further escalation could quickly reverse the fragile recovery.
