European stocks kick off the week on a cautious tone

Stocks in Europe kicked off the week on a cautious note, with the STOXX 50 slipping around 0.2% and the broader STOXX 600 fluctuating near the flatline, as investors remained wary ahead of key geopolitical and economic developments.

European stocks kick off the week on a cautious tone

Market sentiment was subdued as attention turned to the latest round of US-China trade talks, scheduled to take place in London later today. The high-level meeting marks another tentative step toward easing trade tensions between the world’s two largest economies, though expectations for a breakthrough remain muted given the lack of progress in prior rounds. Adding to the cautious mood was a fresh batch of underwhelming economic data out of China. While Chinese exports rose modestly in May, the increase came in slightly below forecasts, suggesting external demand remains fragile. More concerning, however, was the sharp decline in imports, which fell significantly more than expected—a potential red flag for domestic demand and the health of China's broader economy. The weak trade figures reinforced concerns over slowing global growth and added to market jitters in Europe, which is particularly sensitive to shifts in Chinese industrial activity. Sector-wise, technology, construction, and materials stocks were among the worst performers on the day, weighed down by soft global demand indicators and lingering uncertainty around trade policy. Conversely, real estate and industrial miners showed relative strength, supported by a mild rebound in commodity prices and some bargain hunting in previously underperforming segments.

Corporate news

On the corporate front, German software giant SAP saw its shares decline by around 1%, extending recent losses amid broader weakness in the tech sector and lingering investor concerns about demand for enterprise software in a cooling economic environment. Other notable movers included several automakers and luxury goods firms, which were mixed amid uncertainty over the potential impact of new tariffs and shifting global consumer trends. Looking ahead, investors will be closely monitoring any headlines from the US-China talks, as well as upcoming macroeconomic data, including eurozone GDP revisions and US inflation figures due later this week. With central banks across major economies signaling a more cautious stance, markets remain finely balanced between hopes for policy easing and anxiety over lingering geopolitical and economic headwinds.