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European equity markets mostly advanced on Tuesday, extending a cautious rebound as investors weighed corporate earnings, moderate economic data, and a glimmer of hope for relief from U.S. trade tariffs.
As of 03:15 ET (07:15 GMT):
- Germany’s DAX rose 1.3%
- U.K.’s FTSE 100 gained 0.7%
- France’s CAC 40 edged 0.1% lower
- The pan-European Stoxx 600 index increased 0.7%
Tariff Relief Offers Tentative Support, But Uncertainty Persists
Markets found mild support from the temporary U.S. exemption on electronics tariffs, which helped ease pressure on global supply chains. However, President Donald Trump’s broader trade agenda remains uncertain, particularly as the administration moves forward with probes into pharmaceutical and semiconductor imports, potentially leading to fresh duties.
- Federal Reserve Governor Christopher Waller on Monday attempted to reassure markets, stating that inflation resulting from tariffs would likely be “transitory” and that rate cuts remain on the table.
Despite these calming remarks, investor sentiment remains fragile, especially with the U.S.–China trade standoff unresolved and tariff policy still fluid.
Mixed Economic Data Adds to Central Bank Dilemma
France
- March CPI held steady at 0.8% year-on-year, providing the ECB with leeway to pursue another interest rate cut when it meets later this week.
- Policymakers will also need to balance tariff risks and a stronger euro, which could weigh on exports and inflation.
United Kingdom
- Unemployment rate held at 4.4% in February
- Wage growth (excluding bonuses) accelerated to 5.9%, slightly above January’s 5.8%
The Bank of England is watching wage data closely as it gauges whether labor market inflation pressures are cooling enough to allow further rate reductions.
Corporate Results: LVMH Miss Hurts Luxury, Others Show Resilience
LVMH (EPA:LVMH)
- Q1 sales fell 3% YoY
- Wines and spirits division led the decline with a 9% drop
- The results weighed on the broader luxury sector, which is sensitive to Chinese demand trends and macro volatility
Publicis Groupe (EPA:PUBP)
- Posted a strong Q1, with revenue up thanks to major client wins
- Results suggest resilience in advertising and media spending despite the global uncertainty
Beiersdorf (ETR:BEIG)
- Slight beat on Q1 sales
- Derma segment and Nivea brand (up 2.5% organically) drove performance
Oil Prices Rise as China Imports Rebound
Crude prices edged higher on Tuesday, benefiting from improving risk appetite and strong March crude import data from China.
At 03:15 ET:
- Brent crude was up 0.6% to $65.29 per barrel
- WTI crude rose 0.7% to $61.97
China’s crude imports rose nearly 5% YoY in March, boosted by increased Iranian oil deliveries ahead of potential U.S. sanctions enforcement. The data helped soothe fears that the U.S.-China trade war would severely curb oil demand from the world’s top importer.
Outlook: Eyes on ECB, U.S. Tariff Developments
With the European Central Bank meeting approaching, investors are looking for clarity on how policymakers will respond to trade-driven economic risks. Meanwhile, Trump’s next steps on semiconductor and pharmaceutical tariffs remain a key market risk.
Until then, cautious optimism and selective corporate strength may support European equities, but the underlying volatility from trade and inflation narratives is expected to persist.
