European Markets Remain Cautious Amid U.S. Tariff Concerns and Nvidia Earnings

European stocks traded near the flatline on Tuesday, as investors weighed U.S. tariff plans, upcoming earnings from Nvidia (NASDAQ: NVDA), and political developments in Germany.

Market Performance (as of 04:08 ET / 09:08 GMT):

• Stoxx 600: +0.1% to 554.06
• FTSE 100 (UK): +0.1%
• DAX (Germany): -0.1%
• CAC 40 (France): -0.2%

Key Market Drivers

1. U.S. Tariff Plans Weigh on Sentiment

• President Donald Trump reiterated his commitment to reciprocal tariffs during a news conference with French President Emmanuel Macron.
• Investors are concerned about the impact on European exports, particularly in Germany’s industrial sector, which is already facing challenges.
• Market participants are closely monitoring potential retaliatory measures from the EU.

2. Nvidia Earnings Awaited for AI Market Outlook

• Nvidia’s upcoming quarterly results are a key market focus, as they could shed light on AI-related investment trends.
• European investors are looking for signals on AI-driven demand, which has fueled recent tech sector gains.

3. Germany’s Election and Economic Uncertainty

• The CDU-CSU alliance, led by Friedrich Merz, secured the most votes, likely replacing Olaf Scholz as chancellor.
• However, coalition negotiations remain uncertain, as gains by far-right Alternative for Germany (AfD) and far-left parties complicate the process.
• Political instability could delay economic reforms, particularly regarding fiscal easing policies.
• Data released Tuesday showed that Germany’s economy contracted by 0.2% in Q4 2024, following a modest 0.1% growth in Q3, largely due to declining exports and struggles in manufacturing.

Corporate Developments

Unilever CEO Resigns

• CEO Hein Schumacher will step down after less than two years at the helm.
• Fernando Fernandez, the current CFO, will take over on March 1.
• Unilever’s London-listed shares fell following the announcement.

Novo Nordisk Gains on Rival’s Market Exit

• Novo Nordisk (CSE: NOVOb) shares rose after Hims & Hers (NYSE: HIMS) stated it may stop selling compounded versions of semaglutide—a competing product to Wegovy and Ozempic.
• This move could strengthen Novo Nordisk’s dominance in the obesity drug market.

Energy Market Update

• Crude oil prices climbed for the second consecutive day, driven by new U.S. sanctions on Iran, which raised supply concerns.
• Brent crude: Mostly unchanged at $74.33 per barrel.
• WTI crude: +0.2% to $70.81 per barrel.

Market Outlook

• European markets remain in a wait-and-see mode, with tariff uncertainty, German political shifts, and Nvidia’s earnings as key drivers.
• Germany’s economic slowdown raises concerns about broader European growth, while the energy sector faces potential supply risks.