European equity markets began the week on a cautious footing, as investors remained wary of ongoing geopolitical tensions ahead of a closely watched U.S. Federal Reserve policy meeting and a packed schedule of major corporate earnings.
By 08:05 GMT, Germany’s DAX edged up 0.1% and the U.K.’s FTSE 100 gained 0.2%, while France’s CAC 40 slipped 0.1%, reflecting a lack of clear direction across the region.
Geopolitical tensions remain elevated
Concerns around Donald Trump’s earlier comments on Greenland and the risk of a trade dispute between the European Union and the United States have eased somewhat. However, broader geopolitical pressures remain in focus.
Over the weekend, Trump warned that the United States could impose tariffs of up to 100% on Canada if Ottawa were to finalize a trade agreement with China. Canadian Prime Minister Mark Carney responded by saying Canada has no plans to pursue such a deal, but the exchange highlighted lingering strains between the two neighboring countries.
German data takes a back seat to Fed decision
Europe’s main economic release on Monday is the German Ifo business climate index, which is expected to point to improving corporate sentiment in the euro zone’s largest economy.
Despite that, investor attention is firmly fixed on the upcoming policy meeting of the Federal Reserve, which concludes on Wednesday. Markets widely expect interest rates to remain unchanged following three consecutive cuts.
Traders will closely analyze the Fed’s policy statement and comments from Chair Jerome Powell for guidance on the future path of interest rates.
Corporate earnings in the spotlight
In company news, Ryanair, Europe’s largest airline by passenger numbers, said it expects full-year profit after tax to rise by roughly one-third compared with last year. The carrier also anticipates stronger average fare growth than the 7% increase it forecast in November.
However, Ryanair’s third-quarter profit fell sharply from a year earlier, weighed down by an €85 million charge linked to a fine imposed by Italy’s competition authority.
Elsewhere, digital advertising group S4 Capital said its full-year 2025 trading performance exceeded both its revised guidance and current market expectations.
Attention is also shifting toward Wall Street, where more than 90 companies in the S&P 500 are set to report earnings this week. High-profile results are expected from Apple, Meta Platforms, and Microsoft.
So far, the earnings season has been robust, with around 76% of reporting companies beating analyst expectations, according to data from FactSet.
Oil prices consolidate after recent rally
Oil prices edged slightly lower on Monday, pausing after strong gains last week driven by renewed tensions between the United States and Iran, as well as severe winter weather across parts of the U.S.
Brent crude futures slipped 0.2% to $64.92 per barrel, while U.S. West Texas Intermediate crude fell 0.2% to $60.93 per barrel. Both benchmarks rose about 2.7% last week, closing Friday at their highest levels since mid-January.
Trump said on Thursday that an “armada” of U.S. naval forces was heading toward Iran, a key oil producer in the Middle East, with an aircraft carrier strike group expected to arrive in the region in the coming days.
In the United States, crude oil and natural gas output also declined as a winter storm swept across large areas, while spot power prices surged, adding further volatility to energy markets.
