European markets surge following U.S. tariff 90-day suspension
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In the wake of the U.S. announcement suspending reciprocal tariffs, and buoyed by a promising close on Wall Street, European markets opened higher today, posting their strongest gains since the pandemic. Early trading saw London up by 5.6%, Germany's DAX rising by 7.9%, and Paris climbing 5.7%.
Milan's FTSE MIB jumped 8.1%, with substantial gains across key stocks, including Stellantis (+12%), STMicroelectronics (+12.5%), and Prysmian (+14.4%). The banking sector also saw significant rebounds, with Unicredit, Intesa Sanpaolo, and Mps all reporting increases of over 10%.
The de-escalation of U.S. trade policy has temporarily reassured investors, and analysts suggest that financial and cyclical stocks could stand to benefit the most from this reversal in U.S. policy. Meanwhile, EU Commission President Ursula von der Leyen welcomed U.S. tariff suspension and reiterated the need for a "zero-for-zero" tariff agreement between EU and US.
However, economists at Deutsche Bank are tempering the market's optimism. While the tariff suspension is a positive development, they caution that the ongoing political uncertainty and instability will still have significant repercussions for the global economy, even if the tariffs are eventually lifted permanently.
Milan's FTSE MIB jumped 8.1%, with substantial gains across key stocks, including Stellantis (+12%), STMicroelectronics (+12.5%), and Prysmian (+14.4%). The banking sector also saw significant rebounds, with Unicredit, Intesa Sanpaolo, and Mps all reporting increases of over 10%.
The de-escalation of U.S. trade policy has temporarily reassured investors, and analysts suggest that financial and cyclical stocks could stand to benefit the most from this reversal in U.S. policy. Meanwhile, EU Commission President Ursula von der Leyen welcomed U.S. tariff suspension and reiterated the need for a "zero-for-zero" tariff agreement between EU and US.
However, economists at Deutsche Bank are tempering the market's optimism. While the tariff suspension is a positive development, they caution that the ongoing political uncertainty and instability will still have significant repercussions for the global economy, even if the tariffs are eventually lifted permanently.