European stocks edge up

The STOXX 50 and STOXX 600 indexes both edged up 0.1% on Wednesday, marking their highest levels in nearly a month, as markets remained largely in wait-and-see mode amid renewed uncertainty over US trade policy.

Gains were modest, with investors displaying caution ahead of a potential escalation in tariff tensions as President Donald Trump issued fresh threats targeting key sectors of the European economy.

The broader market tone was defined by concerns over protectionist policy risks, particularly following Trump’s announcement of a surprisingly steep 50% tariff on copper imports. The move, which exceeded market expectations, added to global investor anxiety, given copper’s critical role in industrial supply chains, especially for Europe’s auto, electrical, and green energy sectors.

Further raising the stakes, Trump warned that despite apparent progress in ongoing trade negotiations with the European Union, he remains dissatisfied with what he described as “punitive and unfair” EU taxes and regulatory actions targeting US technology companies.

He hinted that the White House may introduce a new unilateral tariff rate within the next two days, casting doubt over the durability of any prospective trade deal and threatening to sour transatlantic relations. As a result, trading volumes remained light, and risk appetite was tempered, with many investors opting to stay on the sidelines until policy clarity improves.

Despite these macro headwinds, select corporate developments provided pockets of strength. Italian banking group UniCredit made headlines by increasing its stake in Germany’s Commerzbank to 20%, signaling a deepening of its cross-border ambitions in the European banking space.

The move was well received by the market, lifting shares of both UniCredit and Commerzbank by nearly 1.5%, as investors welcomed signs of potential consolidation in a sector still grappling with compressed margins and digital transformation.

Another standout performer was EssilorLuxottica, which surged 5% after reports that Meta Platforms acquired just under a 3% stake in the eyewear and lens giant. The stake purchase fueled speculation about a deepening partnership in augmented reality hardware, particularly following prior collaborations on smart glasses. Analysts view the investment as a potential catalyst for innovation and revenue diversification, especially in the context of Meta's growing interest in wearable technologies.

On the downside, mining stocks came under pressure, tracking a pullback in copper prices on the London Metal Exchange, which fell in response to the US tariff announcement and concerns over potential demand disruptions. Glencore slipped 2.3%, while Anglo American lost 2.2%, contributing to a drag on the broader basic materials sector.

Looking ahead, market participants are likely to remain focused on incoming signals from Washington, with attention centered on whether Trump follows through on his tariff threats or offers more conciliatory messaging. Additionally, investors will be closely watching upcoming economic data from the eurozone and the US, as well as corporate earnings pre-announcements, for further guidance on the health of the global economy and the resilience of European equity valuations.

In summary, while the day’s gains were modest, Wednesday’s session reflected the market’s delicate balancing act between cautious optimism over corporate developments and concern over policy risks, particularly in the realm of international trade. As volatility remains a looming threat, any shift in tone from policymakers could quickly alter sentiment across European equities.