European Stocks Edge Higher as Risk Appetite Improves and Earnings Season Intensifies

European equities traded modestly higher on Wednesday, supported by improving global risk sentiment as investors digested a heavy slate of major corporate earnings and signs that uncertainty around U.S. trade policy is beginning to stabilize.

By 03:02 ET (08:02 GMT), Germany’s DAX rose 0.1%, France’s CAC 40 gained 0.2%, and the U.K.’s FTSE 100 outperformed with a 0.5% increase.

Global Risk Appetite Lifts Sentiment

Risk appetite strengthened across global markets, providing a tailwind for European stocks. Wall Street closed higher on Tuesday, while markets across Asia also rallied overnight, with Japan, South Korea, and Australia all hitting record highs.

Investor confidence has improved as uncertainty surrounding U.S. President Donald Trump’s renewed global tariff agenda appears to have eased somewhat. In his State of the Union address overnight, Trump reiterated his commitment to pursuing tariffs, despite a recent Supreme Court ruling that curtailed his authority to impose duties under the International Emergency Economic Powers Act.

However, analysts note that the president’s ability to introduce further tariffs under this framework is now significantly constrained, as Congressional approval would be required for additional measures—reducing the scope for abrupt policy shocks.

Earnings in Focus as Nvidia Looms

The more constructive mood is likely to be tested later in the day, with markets bracing for results from AI heavyweight Nvidia (NASDAQ: NVDA) after the close on Wall Street. The world’s most valuable company has beaten sales expectations for 13 consecutive quarters, shifting investor focus to the magnitude of the expected outperformance.

According to LSEG data, Nvidia is forecast to report a 62% rise in quarterly profits and a 68% surge in revenue for the period ending in January, making its earnings a key test for the broader AI-driven rally.

European Corporate Results Drive Stock Moves

In Europe, a wave of earnings reports kept investors busy:

• HSBC (LON: HSBA), Europe’s largest bank, beat full-year profit forecasts despite a 7% drop in pretax profit. The lender also set a 2026 net interest income target above expectations, signaling confidence that its strategic overhaul is complete and growth momentum is returning.
• E.ON (ETR: EONGn) posted 2025 earnings in line with estimates and raised its five-year investment plan to €48 billion. However, Europe’s largest energy network operator guided for lower net profit in 2026, tempering enthusiasm.
• Leonardo (BIT: LDOF) delivered its strongest results in three years, with new orders in its aeronautics division jumping 55% and net debt nearly halving, as rising European defense spending translated into record bookings.
• Diageo (LON: DGE) cut its annual sales and profit outlook for the second time in four months and slashed its dividend, citing weak demand in the U.S. and China, weighing on shares of the spirits giant.
• Nordex (ETR: NDXG) exceeded expectations with its fourth-quarter results and issued fiscal 2026 guidance above consensus, while also lifting its medium-term profitability target.
• Adecco Group (SIX: ADEN) beat fourth-quarter earnings expectations, but weaker-than-expected gross margins raised concerns about profitability trends at the world’s largest staffing firm.

Overall, European markets remained supported by improving global sentiment and resilient earnings, though investors remain cautious ahead of Nvidia’s results and ongoing scrutiny of trade and policy developments.