European markets face tariff pressures, defense stocks extend gains
Press Hub UCapital
Share:
European equities were poised to retreat from record highs at the open on Tuesday as new U.S. tariffs on Canada, Mexico, and China took effect, intensifying concerns over escalating trade tensions. Euro STOXX 50 and FTSE futures fell 1.1% and 0.5%, respectively, while U.S. futures pointed to a steadier session on Wall Street after Monday’s sharp declines, driven by tariff-related concerns and weaker-than-expected manufacturing data.
Defense stocks continued their strong momentum from Monday’s rally, with Germany’s Rheinmetall, Hensoldt, and Renk advancing on Tradegate. France’s Thales exceeded 2024 profit expectations, supported by increased defense spending and a rebound in air traffic. The company forecasted higher sales and profitability for 2025, with some traders anticipating a 10% surge at market open.
Geopolitical risks remain in focus, as U.S. President Donald Trump’s decision to pause military aid to Ukraine further strains relations between the two former allies, raising uncertainty over European defense commitments.
In corporate news, Abu Dhabi National Oil Company and Austria’s OMV announced plans to merge their polyolefin businesses, forming a $60 billion chemicals conglomerate. Meanwhile, Lindt & Sprüngli reported slightly better-than-expected full-year operating profits despite the impact of historically high cocoa prices.
British equipment rental company Ashtead fell short of profit and revenue expectations, citing weakness in the U.S. construction sector. The firm had previously issued a warning in December regarding market conditions.
As European markets navigate trade pressures and geopolitical shifts, investor focus remains on sector performance, earnings reports, and policy developments that could shape market sentiment in the near term.
Defense stocks continued their strong momentum from Monday’s rally, with Germany’s Rheinmetall, Hensoldt, and Renk advancing on Tradegate. France’s Thales exceeded 2024 profit expectations, supported by increased defense spending and a rebound in air traffic. The company forecasted higher sales and profitability for 2025, with some traders anticipating a 10% surge at market open.
Geopolitical risks remain in focus, as U.S. President Donald Trump’s decision to pause military aid to Ukraine further strains relations between the two former allies, raising uncertainty over European defense commitments.
In corporate news, Abu Dhabi National Oil Company and Austria’s OMV announced plans to merge their polyolefin businesses, forming a $60 billion chemicals conglomerate. Meanwhile, Lindt & Sprüngli reported slightly better-than-expected full-year operating profits despite the impact of historically high cocoa prices.
British equipment rental company Ashtead fell short of profit and revenue expectations, citing weakness in the U.S. construction sector. The firm had previously issued a warning in December regarding market conditions.
As European markets navigate trade pressures and geopolitical shifts, investor focus remains on sector performance, earnings reports, and policy developments that could shape market sentiment in the near term.