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European Markets Hold Steady as Investors Await U.S.-EU Trade Deal Clarity
European stock markets were largely flat on Monday as investors digested a mix of corporate earnings while awaiting further clarity on the ongoing trade negotiations between the United States and the European Union.
The STOXX 600, a broad measure of European stocks, gained a slight 0.03%, reaching 547.15 points as of 08:31 GMT. Despite this modest uptick, investor sentiment remains cautious as they monitor developments in trade talks that could have significant implications for the global economy.
Trade Negotiations in Focus
U.S. Commerce Secretary Howard Lutnick expressed confidence on Sunday that the U.S. would be able to secure a trade deal with the European Union, although he emphasized that August 1 remains a hard deadline for the imposition of tariffs. The looming deadline has investors on edge, as the EU is preparing retaliatory measures if talks with Washington fail to yield a deal.
The EU-U.S. trade negotiations are critical to global trade dynamics, and investors are keenly awaiting further developments in the coming weeks. Any positive news could provide a much-needed boost to market sentiment, while failure to reach an agreement could lead to heightened volatility.
Sector Performances: Basic Resources Lead, Banks Weigh Down Market
The basic resources sector emerged as the strongest performer on Monday, gaining 3.3%, driven by stronger metals prices. Companies such as Glencore, Anglo American, and Antofagasta saw stock price increases between 3.3% and 4%.
In contrast, the banking sector was a laggard, with stocks slipping by 0.7%. Investor concerns surrounding global trade uncertainties and interest rate hikes from the European Central Bank (ECB) have weighed on banking stocks.
Strong Earnings Drive Airline Stocks Higher
Airline stocks stood out as some of the biggest gainers in the STOXX 600. Ryanair, Europe’s largest low-cost carrier, saw its stock surge 6.2% after reporting that its quarterly profit more than doubled. This positive earnings report lifted sentiment for other airline stocks as well, with Lufthansa rising 1.3% and EasyJet gaining 1.1%.
Mixed Earnings Results
Several companies reported earnings that impacted their stock prices. For instance, Boliden, a Swedish miner, surged 5.9% after being upgraded by Berenberg to a “buy” rating from “hold”. Belimo, a Swiss heating and ventilation company, rose 5.5% following a better-than-expected half-year profitability report.
On the downside, Stellantis, the global automaker, fell 1.2% after revealing it expects a net loss of 2.3 billion euros ($2.68 billion) for the first half of 2025. Saab, the Swedish defense material maker, also experienced a sharp decline of 7.4% after a notable rally in the previous session.
Focus on the ECB and Upcoming Earnings Reports
The European Central Bank (ECB) is expected to keep interest rates steady at 2.0% following a series of cuts, as investors await any further guidance on monetary policy. Additionally, an ECB survey released on Monday revealed that firms in the Eurozone remain optimistic about their growth prospects, although profit pressures remain due to trade tensions.
Looking ahead, big tech earnings will be in focus later this week, with reports from Alphabet (Google’s parent company) and Tesla expected to capture investor attention. These results will be closely watched for signs of growth amidst global economic uncertainties.
European stocks were mixed on Monday, influenced by a combination of strong corporate earnings, concerns over ongoing trade negotiations, and the economic outlook in the face of rising global tensions. As investors await clearer signals from trade talks and central banks, volatility may continue to impact market sentiment in the short term.
