European Stocks Slip as Trade Tensions Escalate and Earnings Season Heats Up
European markets edged lower on Tuesday, weighed down by persistent uncertainty surrounding tariffs, while investors continued to sift through a wave of corporate earnings reports.
As of 03:02 ET (07:02 GMT), Germany’s DAX and France’s CAC 40 each fell by 0.2%, while the U.K.’s FTSE 100 remained relatively flat.
Market sentiment in Europe has been shaky since President Donald Trump announced earlier this month a plan to impose a 30% tariff on EU imports starting August 1. With the deadline fast approaching and no agreement yet in place, pressure is mounting.
While both sides are still in talks, the EU has been lobbying for the U.S. to stick with a 10% tariff baseline. However, The Wall Street Journal reported that U.S. officials recently signaled they expect greater concessions — potentially including a 15% minimum tariff or more.
In response, several EU countries, including Germany, are reportedly considering broad “anti-coercion” measures aimed at U.S. services if negotiations fail, according to Reuters, citing European diplomats.
Corporate Earnings in Focus
As the tariff deadline looms, investors are closely analyzing quarterly earnings for signs of how trade uncertainty may be impacting profitability and consumer behavior.
They’re also watching how the euro’s 9% surge in Q2 — from April to June — is affecting exporters in Europe’s trade-driven economy.
Some notable corporate updates include:
- Lindt & Spruengli raised its 2025 organic sales growth forecast to 9–11%, up from 7–9%, citing strong brand loyalty and demand for premium chocolate.
- Norsk Hydro posted a 33% rise in core profit for Q2, driven by higher aluminum and energy prices.
- Julius Baer, the Swiss private bank, reported a 35% drop in first-half net profit, missing expectations due to increased loan loss provisions and a charge related to its exit from Brazil.
- Mitie, a U.K. facilities management firm, reported a 10.1% year-on-year revenue increase in the first quarter of FY26, aided by new contracts, successful project delivery, and pricing strategies.
Eyes on the ECB
With little new economic data out of Europe Tuesday, attention is turning to the European Central Bank’s policy meeting later this week.
Analysts expect the ECB to hold its deposit rate steady at 2%. In June, the central bank cut rates by 25 basis points — its eighth cut in a year — citing cooling inflation and weak economic momentum. However, policymakers indicated a likely pause in July, citing ongoing uncertainty around U.S.-EU trade relations.
Oil Prices Drop on Trade Fears
Meanwhile, oil prices fell on Tuesday as fears of a looming trade war between the U.S. and the EU sparked concerns about global demand.
By 03:02 ET, Brent crude was down 0.4% to $68.94 per barrel, while U.S. WTI futures slipped 0.4% to $65.67. Both had also ended slightly lower on Monday.
With new U.S. tariffs on EU goods — and others — set to take effect August 1, White House officials have labeled it a firm “hard deadline,” further heightening economic tensions.
