Barclays: Retail buyers likely drove the latest leg of the rally
Investing.com - European stocks slipped lower Tuesday on lingering tariff uncertainties, while investors continued to wade through a deluge of quarterly corporate earnings.
At 03:02 ET (07:02 GMT), the DAX index in Germany dropped 0.2%, the CAC 40 in France slipped 0.2%, while the FTSE 100 in the U.K. traded largely unchanged.
European investors have been on edge since U.S. President Donald Trump announced earlier in July that he would impose a 30% tariff on goods imported from the EU starting Aug. 1.
The two sides have been in negotiations, but the deadline is rapidly approaching with no trade deal in sight.
The European bloc has been pushing for Washington to agree to maintain a baseline 10% duty, but the Wall Street Journal reported that U.S. officials told the EU’s trade chief last week that they expect Trump to demand more concessions, including a baseline tariff of 15% or higher.
With this in mind, a growing number of European Union member states, including Germany, are considering using wide-ranging "anti-coercion" measures targeting U.S. services if the EU cannot reach a trade deal, Reuters reported, citing comments from EU diplomats.
Quarterly earnings continue
Ahead of that August deadline, investors will be studying a series of quarterly corporate earnings, parsing through the numbers for any clues on the impact trade uncertainty has had on profitability and consumer demand.
Additionally, investors will be looking at how much the euro’s rise has eaten into profits of the firms in the bloc’s export-reliant economy after the single currency surged 9% in the April-June quarter.
Lindt & Spruengli (SIX:LISN) raised its organic sales growth forecast for 2025, to between 9% and 11%, from previous guidance of 7% to 9%, with the Swiss chocolate maker citing consumer loyalty and a trend towards more premium products.
Norsk Hydro (OTC:NHYDY) posted a 33% increase in second-quarter core profit, with the Norwegian renewable energy company citing rising aluminium and energy prices for the boost.
Swiss lender Julius Baer (SIX:BAER) missed expectations for first half net profit, which fell 35% on the year, as the results reflected a previously disclosed increase in loan loss provisions, as well as a charge from the sale of its Brazilian wealth management business.
U.K. facilities group Mitie (LON:MTO) reported a strong start to its fiscal year, with revenue from the first quarter of FY26 revenue rising 10.1% year-on-year, helped by new contract wins, project delivery and pricing.
ECB meeting looms
The economic data slate is largely empty in Europe Tuesday, and the main focus will be on the European Central Bank’s next policy decision later in the week.
Analysts widely expect the ECB to keep its key deposit rate steady at 2%.
At its last meeting in June, policymakers, bolstered by signs of flagging inflation and tepid economic activity in the 20-member euro zone, slashed rates by 25 basis points.
It was the eighth reduction in a year, although it came with an indication from the ECB that it would likely pause in July, largely due to uncertainty around trade tensions with Washington.
Crude falls on trade concerns
Oil prices fell Tuesday on fears the increasingly likely trade war between the European Union and the U.S., two major consumers, will hit economic activity, and thus crude demand.
At 03:02 ET, Brent futures dropped 0.4% to $68.94 a barrel, and U.S. West Texas Intermediate crude futures fell 0.4% to $65.67 a barrel. Both settled slightly lower on Monday.
U.S. tariffs on EU imports, along with levies against a host of other major U.S. trading partners, are set to take effect from August 1, which has been described as a “hard deadline” by White House officials.