EU stocks rally slows as investors digest tariff risks and inflation
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European equities take a breather after a nearly 10% surge in 2025
The stoxx 600 rally is losing steam, with stoxx 50 futures down 0.1% ahead of the market open. FTSE futures (ffic1) are flat despite higher-than-expected UKinflation data, signaling that traders are reassessing the outlook after weeks of strong gains.
Trump’s tariff plans in focus
Investors remain cautious over Donald Trump’s latest comments on 25% tariffs for autos, semiconductors, and pharmaceuticals, which could further strain international trade. While markets initially shrugged off the news, uncertainty over potential supply chain disruptions and retaliatory measures could weigh on sentiment.
Corporate earnings in the spotlight
HSBC(hsba) reported better-than-expected annual profit and announced a $2 billion share buyback, though its hong kong-listed shares only rose 0.17%; BP(bp.) is considering selling its castrol lubricants business, valued at $10 billion, according to Bloomberg; BAE systems (ba.) secured £33.7 billion ($42.5 billion) in new orders in 2024, bringing its backlog to a record £77.8 billion; Philips (phia) disappointed investors, forecasting 1%-3% growth in 2025 after a weaker-than-expected q4, weighed down by a double-digit decline in China.
Trading outlook
With european markets near record highs, traders are looking for catalysts to sustain further upside. Key support levels for the stoxx 600 sit at 485-490, while resistance remains near the 2025 highs. Geopolitical risks, tariff uncertainty, and upcoming central bank decisions will likely shape market direction in the coming weeks.
The stoxx 600 rally is losing steam, with stoxx 50 futures down 0.1% ahead of the market open. FTSE futures (ffic1) are flat despite higher-than-expected UKinflation data, signaling that traders are reassessing the outlook after weeks of strong gains.
Trump’s tariff plans in focus
Investors remain cautious over Donald Trump’s latest comments on 25% tariffs for autos, semiconductors, and pharmaceuticals, which could further strain international trade. While markets initially shrugged off the news, uncertainty over potential supply chain disruptions and retaliatory measures could weigh on sentiment.
Corporate earnings in the spotlight
HSBC(hsba) reported better-than-expected annual profit and announced a $2 billion share buyback, though its hong kong-listed shares only rose 0.17%; BP(bp.) is considering selling its castrol lubricants business, valued at $10 billion, according to Bloomberg; BAE systems (ba.) secured £33.7 billion ($42.5 billion) in new orders in 2024, bringing its backlog to a record £77.8 billion; Philips (phia) disappointed investors, forecasting 1%-3% growth in 2025 after a weaker-than-expected q4, weighed down by a double-digit decline in China.
Trading outlook
With european markets near record highs, traders are looking for catalysts to sustain further upside. Key support levels for the stoxx 600 sit at 485-490, while resistance remains near the 2025 highs. Geopolitical risks, tariff uncertainty, and upcoming central bank decisions will likely shape market direction in the coming weeks.