European Stocks Edge Higher as Corporate Earnings, Trade Optimism Boost Sentiment

European equity markets traded slightly higher on Tuesday, supported by a flood of quarterly corporate earnings results and tentative hopes that global trade tensions could ease.

• At 03:05 ET (07:05 GMT):
  • Germany’s DAX rose 0.5%.
  • France’s CAC 40 gained 0.1%.
  • U.K.’s FTSE 100 edged up 0.1%.

The pan-European Stoxx 600 index has now closed higher for five consecutive sessions, recovering its year-to-date gains after a volatile March and early April.

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Key Corporate Earnings Highlights

• HSBC (LON:HSBA):
  • Announced its stake in Bank of Communications will fall to around 16% from 19.03%.
  • Will book a loss of up to $1.6 billion due to the Chinese bank’s private share placement.
• Deutsche Bank (ETR:DBKGn):
  • Reported a 39% rise in Q1 profit, driven by strong bond and currency trading revenues during market volatility.
• BP (NYSE:BP):
  • Reported underlying replacement cost profit of $1.38 billion for Q1, a 49% drop amid strategic resets and weaker crude prices.
• Carlsberg (CSE:CARLb):
  • Delivered Q1 sales slightly below expectations but maintained its full-year guidance.
• Adidas (OTC:ADDYY):
  • Confirmed its 2025 guidance.
  • Warned that planned higher tariffs on U.S. imports could raise product costs.
• Lufthansa (ETR:LHAG):
  • Reaffirmed its 2025 operating result forecast.
  • Cautioned that it was monitoring potential impacts from U.S. trade tensions.

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Trade Tariff Developments

Sentiment improved further after a Wall Street Journal report indicated that the Trump administration will soften automotive tariffs:

• U.S. automakers will not face compounded duties (e.g., on steel and aluminum).
• Some duties on foreign parts will be scaled back retroactively.

This move could relieve pressure on both European and global carmakers, helping mitigate fears of escalating tariffs hitting consumer prices and manufacturing costs.

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German Consumer Sentiment Brightens

Data from GfK showed:

• The German consumer sentiment index for May rose to -20.6 from -24.3 in April.
• This marks another month of improvement, suggesting German consumers are gradually regaining confidence despite broader economic uncertainties.

Later in the session, Eurozone confidence readings will be released, while U.S. JOLTS job openings data will provide fresh insight into the American labor market.