Major European bourses rebounded on Tuesday, snapping a four-day losing streak. The STOXX 50 rose 1.7% and the STOXX 600 gained 1.5%, after Monday’s sharp sell-off pushed them to 8-month and 14-month lows, respectively. The bounce was fueled by bargain hunting and cautious optimism that diplomatic efforts might still avert a full-blown trade war.
European bourses rebound after big sell-off
Trade tensions remained elevated, with European Commission President Ursula von der Leyen confirming that the EU had offered Trump a “zero-for-zero tariffs” deal on industrial goods—an offer he rejected outright. She warned that the bloc is ready to retaliate in kind, and reports indicated the EU is preparing to impose 25% tariffs on a targeted list of U.S. products, which could include agricultural goods, motorcycles, and industrial equipment. Meanwhile, China escalated its rhetoric, vowing to “fight to the end,” adding to global trade uncertainty.
Despite the geopolitical overhang, nearly all sectors traded higher, led by consumer discretionary, technology, and healthcare stocks. Investors rotated into blue-chip names and defensives, viewing them as relatively insulated from trade-related risks.
Luxury and tech lead the gainers
On the corporate front, luxury and tech led the charge: LVMH climbed 2.3%, Hermès rose 2%, and ASML surged 2.9% on renewed optimism around demand for high-end goods and chipmaking equipment. Pharma giants also performed well, with AstraZeneca up 1.4% and L'Oréal adding 1.4%, benefiting from their strong international exposure and steady earnings outlooks.
Analysts cautioned that the rebound could be short-lived unless there are concrete signs of progress on the trade front, but Tuesday’s rally reflected underlying market resilience amid a storm of macroeconomic headwinds.
