European shares rise on Wednesday

European stocks advanced on Wednesday, with the STOXX 50 up 0.5% and the STOXX 600 rising 0.3%, as investors weighed progress in trade talks between the US and its key trading partners, while closely watching the ECB forum for signals on the central bank’s policy outlook for the remainder of the year.

Market sentiment remained cautiously optimistic amid hopes that ongoing negotiations could avert a full-scale trade conflict, despite lingering geopolitical risks and tightening financial conditions.

US President Trump reaffirmed he would not postpone the July 9 deadline for the resumption of higher tariffs, reiterating his threat to end talks and impose new duties on several countries, including Japan. The firm stance added to investor unease but was largely offset by indications that some trading partners remain open to compromise.

Meanwhile, ECB President Christine Lagarde is set to address policymakers later today, with recent comments from several ECB officials highlighting increasing concern over the euro's strength and its potential dampening effect on inflation. Market participants are looking for any signs of a shift in tone or forward guidance, particularly in light of persistent inflationary pressures and uneven growth across the eurozone.

Among sectors, banks, oil and gas, basic resources, and autos led the gains, benefiting from rising bond yields, stable energy prices, and easing supply chain disruptions. Real estate stocks lagged behind, pressured by concerns over elevated interest rates and sluggish demand in commercial property markets.

On the corporate front, luxury and pharmaceutical stocks performed well, with LVMH climbing 1.2%, Hermes up 0.6%, and Novo Nordisk gaining 0.6%, supported by resilient earnings and positive analyst sentiment. In contrast, tech and consumer staples such as SAP, Nestle, and ASML Holding traded little changed, reflecting a more cautious stance among investors ahead of key economic data later in the week.