European Stocks Mixed as Trade Uncertainty Lingers, Investors Eye Fed Decision and Earnings

European equity markets traded in a cautious manner on Tuesday, with investors grappling with renewed trade uncertainty, a packed central bank calendar, and ongoing corporate earnings releases.

As of 03:15 ET (07:15 GMT), Germany’s DAX slipped 0.1%, while France’s CAC 40 was flat. The U.K.’s FTSE 100 gained 0.4%, rebounding after a bank holiday closure on Monday. The FTSE had marked a record streak of consecutive daily gains on Friday.

Trade Uncertainty Reasserts Itself

Investor sentiment soured as optimism from last week’s talk of potential U.S.-China negotiations faded in the absence of concrete developments. Markets were rattled by U.S. President Donald Trump’s latest trade salvo, in which he warned of impending tariffs on pharmaceutical imports—a move that could significantly impact Europe’s heavyweight healthcare sector.

The lack of detailed progress in trade discussions has reignited concerns over a prolonged standoff between the U.S. and its trading partners, creating headwinds for risk appetite across global markets.

Focus Turns to Central Banks

Markets are also preparing for a busy week of monetary policy decisions, led by the U.S. Federal Reserve’s two-day meeting beginning later Tuesday. While the Fed is widely expected to hold interest rates steady, investors will be watching closely for any signals in the accompanying statement that reflect the economic impact of Trump’s tariff agenda. Updated quarterly forecasts at the Fed’s June meeting are likely to be more instructive on the central bank’s next steps.

In Europe, investors are also awaiting policy updates this week from the Bank of England, the Norges Bank, and the Riksbank, all of which are navigating their own domestic pressures amid global headwinds.

Corporate Earnings in the Spotlight

Earnings remained a key driver in individual stock movements across Europe. Dutch healthcare giant Philips (AS:PHG) cut its 2025 profit margin forecast, citing significant headwinds from U.S. tariffs despite having taken “substantial tariff mitigation” measures. Shares were under pressure following the update.

German fashion label Hugo Boss (ETR:BOSSn) reported quarterly revenue that exceeded expectations and reaffirmed its full-year outlook. However, the company cautioned that global consumer sentiment remains fragile in light of ongoing trade uncertainty.

Online fashion retailer Zalando (ETR:ZALG) also topped Q1 revenue estimates, supported by a rise in new customers and a solid start to seasonal sales. The company confirmed its 2025 guidance, offering a rare dose of optimism in the retail sector.

In a major M&A development, U.S.-based DoorDash (NASDAQ:DASH) announced plans to acquire British food delivery platform Deliveroo (OTC:DROOF) for £2.9 billion ($3.9 billion), marking a significant push into international markets. The deal underscores the growing trend of consolidation in the competitive global food delivery space.

With volatility expected to remain elevated, markets will closely monitor central bank signals, earnings updates, and trade developments as key drivers through the rest of the week.