European stocks edge higher as ceasefire holds; Trump attacks Powell again

Investing.com - European stocks edged higher Thursday, with investors monitoring the Israel-Iran ceasefire, the looming U.S. tariff deadline as well as the latest comments from Fed Chair Jerome Powell. 

At 04:15 ET (07:15 GMT), the DAX index in Germany gained 0.5%, the CAC 40 in France climbed 0.4% and the FTSE 100 in the U.K. rose 0.1%. 

Ceasefire, trade tariffs in focus

The ceasefire between Israel and Iran, brokered by U.S. President Trump earlier this week, appeared to be holding, relieving concerns of supply-chain disruptions that had pressured global markets. 

However, the July 9 deadline for trade deals with the Trump administration is drawing nearer with very few signs of major agreements being signed, meaning the U.S. tariffs could very soon return to the markets’ radar.

Trump criticises Powell, again

Federal Reserve Chair Jerome Powell, speaking during congressional testimony on Wednesday, reiterated that interest rate cuts would wait until the inflationary impact of tariffs is clarified, noting that tariffs could push up prices beyond a one-time increase. 

This cautious stance by Powell prompted more criticism from U.S. President Donald Trump , who said he plans to announce a replacement for Powell, whose term ends in May 2026.

“I know, within three or four people, who I’m going to pick,” Trump said. “He goes out pretty soon fortunately, because I think he’s terrible.”

A report from the Wall Street Journal said Trump has toyed with the idea of naming Fed Chair Jerome Powell’s replacement as early as September, which could undermine Powell’s authority for the remainder of his term to next May.

Trump has repeatedly criticised Powell for not cutting interest rates, and such a move could erode investor faith in the U.S. central bank’s independence in setting policy.

H&M’s Q2 sales fall slightly more than expected

In the corporate sector, Swedish fashion retailer H&M (ST:HMb) reported a slightly bigger drop than expected in second-quarter sales, with the world’s second-largest fashion retailer expecting sales in June, measured in local currencies, to rise 3%.

Elsewhere, defence stocks are likely to be in demand after NATO leaders backed the big increase in defence spending, while oil major Shell (LON:SHEL) has denied a Wall Street Journal story that it was in early discussions with British rival BP (NYSE:BP) about a takeover.

Crude edged higher

Crude prices rose Thursday, adding to the previous session’s gains as a larger-than-expected draw in U.S. crude stocks signalled firm demand from the world’s largest consumer.

At 04:15 ET, Brent futures climbed 0.4% to $66.70 a barrel and U.S. West Texas Intermediate crude futures rose 0.5% to $65.23 a barrel.

Both benchmarks climbed nearly 1% on Wednesday, recovering from early-week losses after data showing U.S. crude oil inventories falling for a fifth straight week, indicating resilient demand in the world’s largest economy.

U.S. crude inventories fell by 5.8 million barrels, the Energy Information Administration said on Wednesday, and gasoline stocks unexpectedly fell by 2.1 million barrels, as gasoline supplied, a proxy for demand, rose to its highest since December 2021.