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European equity markets opened the week with solid gains on Monday, buoyed by news that the White House will exempt electronics from its steep reciprocal tariffs, easing fears of an immediate hit to global tech supply chains. The move lifted risk sentiment, especially across tech-heavy sectors, although caution lingered over the potential for further trade measures.
As of 03:05 ET (07:05 GMT):
- Germany’s DAX climbed 2.1%
- France’s CAC 40 rose 2.0%
- U.K.’s FTSE 100 added 1.5%
- The pan-European Stoxx 600 index gained 1.4%
Electronics Exemption Boosts Market Confidence
Investor sentiment improved after U.S. Customs and Border Protection issued guidance late Friday indicating that smartphones, computers, and other electronics will be excluded from the 145% tariffs recently imposed on Chinese goods by President Donald Trump.
The exemption was especially welcome news for tech companies with heavy exposure to China—such as Apple (NASDAQ:AAPL)—and helped reverse some of the market pessimism that followed earlier tariff announcements.
European tech stocks led the rally:
- ASML (AS:ASML) and SAP (ETR:SAPG) were among the top gainers, supported by expectations of less disruption in the global supply chain.
Still, Trump warned over the weekend that the exemption is temporary, and that he plans to announce separate tariffs on electronics next week, possibly targeting semiconductors. Electronics imports from China are also still subject to a 20% tariff imposed in March, he added.
ECB Meeting in Focus Amid Rising Headwinds
With no major economic data releases scheduled for Monday, attention is shifting to the European Central Bank’s policy meeting later this week. Analysts expect policymakers to adjust their tone in response to:
- New U.S. tariffs on EU goods
- A strengthening euro
- Falling energy prices
According to analysts at ING, this combination could lead the ECB to revise its growth and inflation outlook downward. While optimism had improved in March due to Germany’s fiscal reversal and higher defense spending, renewed trade stress may now prompt a more cautious stance.
Corporate Highlights
- Holcim (SIX:HOLN), the Swiss construction giant, announced plans to spin off its North American unit in June, pending shareholder approval at its May 14 AGM.
- The move is seen as part of a broader strategic streamlining to unlock regional value.
Oil Prices Stabilize After Sharp Drop
Crude oil prices held steady on Monday, following weeks of steep losses tied to trade war concerns and demand uncertainty.
As of early trade:
- Brent crude was down 0.1% at $64.67 per barrel
- WTI crude fell 0.1% to $61.44 per barrel
Both benchmarks have shed about $10 per barrel since the start of the month, pressured by fears that the U.S.-China trade war will dent global economic activity and fuel consumption.
Outlook: Relief Rally or Temporary Reprieve?
While today’s gains reflect short-term relief, markets remain wary of:
- Trump’s next round of tariff announcements
- China’s response and possible countermeasures
- Broader implications for growth, inflation, and monetary policy
As the ECB meets later this week and global trade tensions evolve, volatility is likely to remain elevated, particularly in trade-sensitive sectors such as technology, autos, and industrials.
