European Markets Rise as CAC 40 Reaches Record High on Earnings Optimism
European stocks edged higher on Monday, as the French CAC 40 index hit a new all-time high. Investors welcomed easing geopolitical tensions and a steady stream of positive corporate earnings, helping markets maintain a bullish tone at the start of the week.
Germany’s DAX index closed 0.4% higher, France’s CAC 40 rose 0.6%, and the FTSE 100 in the U.K. gained 0.2%.
Improved U.S.–China Relations Lift Global Sentiment
Market confidence strengthened on hopes that tensions between the United States and China are finally easing.
U.S. President Donald Trump said he expects to reach a “fair trade deal” with Chinese President Xi Jinping during their upcoming meeting in South Korea next week.
Trade conflicts over tariffs, technology, and market access have long dampened global sentiment. Renewed optimism about a possible breakthrough boosted risk appetite across European markets.
Support for Ukraine and Signs of Western Unity
Investor sentiment was further supported by a joint statement from Britain, France, and Germany, backing President Trump’s efforts to end the war in Ukraine.
The leaders expressed strong support for an immediate ceasefire and outlined plans to increase economic pressure on Russia. They also proposed using immobilized Russian sovereign assets to fund Ukraine’s recovery efforts.
This renewed sense of unity among Western allies strengthened investor belief that diplomatic progress may be achievable, adding further confidence to European markets.
Earnings Season Remains in Focus
While the European economic calendar was quiet, all eyes were on European Central Bank President Christine Lagarde, who was scheduled to speak later in the day — one of the final opportunities before the pre-meeting blackout period.
Investors are primarily focused on the ongoing quarterly earnings season.
According to Morgan Stanley, about 21% of companies have reported, showing a “+14% net skew to beats” — below the 25% achieved in the previous quarter. The data suggests that while results are positive, performance varies across sectors.
Among the notable reports:
- Assa Abloy posted slightly better-than-expected third-quarter earnings, despite weakness in North America’s housing market.
- Husqvarna saw softer sales due to uneven demand and weak North American performance.
- Unilever delayed its planned Magnum Ice Cream Company demerger because of the U.S. government shutdown, promising updates soon.
- L’Oréal is set to announce its latest earnings after recently acquiring Kering’s beauty division for €4 billion.
Investors also look ahead to key U.S. earnings from Netflix and Coca-Cola, due on Tuesday, which may influence global market sentiment.
Oil Prices Rebound Slightly
Crude oil prices rose on Tuesday, recovering modestly from a five-month low. Brent crude climbed 0.6% to $61.35 per barrel, while WTI futures increased 0.6% to $57.36.
However, concerns remain about a potential supply glut and slowing demand, both of which have weighed on energy markets. Analysts warn that unresolved trade disputes and the International Energy Agency’s forecast for rising output in 2026 could continue to pressure prices.
