European Stocks Gain as U.S.-China Tariff Truce Extends; CPI in Focus
European stocks rose on Tuesday after news that the United States and China had extended their tariff truce. Investors also awaited key U.S. inflation data later in the day.
At 03:10 ET (07:10 GMT), Germany’s DAX was up 0.3%, France’s CAC 40 gained 0.5%, and the U.K.’s FTSE 100 climbed 0.4%.
Tariff Truce Boosts Market Sentiment
Global sentiment improved after the U.S. and China agreed late Monday to extend their tariff pause for another 90 days. The move prevents steep duties that could have disrupted global trade.
Under the agreement, both countries will keep reduced tariff levels in place until November 10. U.S. tariffs on Chinese goods will remain between 30% and 50%, while China’s tariffs on U.S. products will stay between 10% and 20%. This follows a May agreement to slash tariffs from levels above 100%.
The extension also preserves recent trade openings, including U.S. chip exports to China and Chinese rare earth shipments to the U.S.
CPI Report and European Data in Spotlight
Later today, European investors will watch Germany’s ZEW economic sentiment index for August, a key indicator of the eurozone’s largest economy.
In the U.K., data showed the unemployment rate held at 4.7% in the three months to June, the highest since July 2021. Wage growth, excluding bonuses, remained at an annual 5.0%.
However, the main focus will be the U.S. Consumer Price Index (CPI) for July. Economists expect annual CPI to rise to 2.8% from 2.7% in June, keeping inflation above the Federal Reserve’s 2% target. The report will help shape expectations for future Fed rate cuts, especially amid the ongoing impact of Trump’s tariffs.
Earnings Updates
Corporate earnings are slowing as August progresses, but some notable results were released:
- Hannover Re (OTC:HVRRY) posted a 38% jump in Q2 net income, supported by stronger underwriting in property and casualty reinsurance.
- Bellway (LON:BWY) moved to a net cash position of £42 million at the end of fiscal 2025, compared to £10.5 million in net debt a year earlier.
- Entain (LON:ENT) raised its full-year profit guidance after strong first-half results, with a 35% revenue surge at U.S. joint venture BetMGM.
Oil Prices Edge Higher on Tariff News
Crude prices rose slightly as the tariff truce eased concerns over global economic growth in the world’s top two oil-consuming nations.
At 03:10 ET, Brent crude futures were up 0.3% at $66.81 per barrel, while WTI crude gained 0.4% to $64.20.
However, geopolitical risks remain. U.S. President Donald Trump is scheduled to meet Russian President Vladimir Putin in Alaska on Friday to discuss ending the war in Ukraine.
