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European equity markets edged lower on Monday as renewed uncertainty over U.S. trade policy dampened risk appetite at the start of the new week, offsetting recent optimism driven by improving earnings and economic data.
By 03:02 ET (08:02 GMT), Germany’s DAX fell 0.6%, France’s CAC 40 slipped 0.2%, and the U.K.’s FTSE 100 declined 0.1%.
Tariff Uncertainty Returns to the Forefront
Global equities initially found support late on Friday after the U.S. Supreme Court struck down most of the tariffs imposed by U.S. President Donald Trump last year, ruling that the emergency law used to justify them did not permit such measures.
That relief proved short-lived. Over the weekend, Trump announced a new global tariff regime under a different legal statute, first proposing a 10% levy before raising it to 15%. The tariffs could remain in place for up to five months while the administration looks for more permanent legal solutions.
The rapid policy shifts have unsettled investors, reviving concerns that trade decisions are being made with little predictability. This renewed uncertainty weighed on European stocks early Monday, despite otherwise constructive regional fundamentals.
German Ifo Survey in Focus
European market sentiment had strengthened in recent weeks, pushing the pan-European STOXX 600 index to a record high last week. The rally was supported by broadly positive corporate earnings and data pointing to a gradual economic recovery.
Figures released on Friday showed euro zone business activity accelerated more than expected in May, with manufacturing returning to expansion for the first time since October.
Later on Monday, attention will turn to Germany’s Ifo business climate survey, which is expected to show a further improvement in confidence in the euro zone’s largest economy, reinforcing signs of stabilization in the region.
Earnings Watch: Nvidia in the Spotlight
The week ahead brings several key corporate earnings in Europe, including results from HSBC, Deutsche Telekom, Iberdrola, and Schneider Electric. However, the most closely watched release will come from the United States, where AI chipmaker Nvidia (NASDAQ: NVDA) is due to report on Wednesday.
Among individual European names, PostNL cut its annual dividend by 43% and warned that free cash flow could turn negative again in 2026. The Dutch postal group reported a full-year free cash flow loss of €25 million, compared with a €12 million profit a year earlier, despite a 2.2% rise in revenue to €3.32 billion.
Spanish dermatology specialist Almirall said sales of its eczema biologic Ebglyss tripled in its second year on the European market, lifting the company’s annual revenue above €1 billion for the first time.
Meanwhile, Rolls-Royce is reportedly urging the British government to provide taxpayer backing for the £3 billion development of a new aircraft engine, as the company seeks to re-enter the short-haul aviation market, according to the Financial Times.
Oil Prices Pull Back Ahead of U.S.–Iran Talks
In commodity markets, oil prices retreated sharply, giving back part of last week’s strong rally as investors assessed the prospects of renewed U.S.–Iran nuclear talks and the broader impact of U.S. trade uncertainty.
Brent crude futures fell 1.3% to $70.39 a barrel, while U.S. West Texas Intermediate crude dropped 1.4% to $65.55 a barrel. Both benchmarks had surged nearly 6% last week on fears of a potential U.S.–Iran conflict and an unexpected drawdown in U.S. crude inventories.
The United States and Iran are now expected to hold a third round of nuclear talks on Thursday in Geneva, raising hopes of a diplomatic breakthrough that could ease concerns over supply disruptions from the Middle East. Iran remains a key OPEC producer, holding some of the world’s largest proven crude reserves.
Overall, European markets began the week on a cautious note, with investors balancing improving regional fundamentals against renewed uncertainty over global trade policy and geopolitics.
