European stocks surge higher on trade deal optimism; earnings and ECB in spotlight

Published 24/07/2025, 09:34
© Reuters.

Investing.com - European stocks rose Thursday on growing confidence of a trade deal between the U.S. and the European Union, while investors digested more corporate earnings ahead of an ECB policy meeting 

At 04:30 ET (08:30 GMT), the DAX index in Germany climbed 1.1%, the CAC 40 in France gained 0.4% and the FTSE 100 in the U.K. rose 0.8%. 

EU-U.S. trade deal optimism 

Global sentiment received a boost earlier this week on the news that the U.S. and Japan had reached a trade agreement, and hopes are growing that the Trump administration will also shortly sign a deal with the European Union, another major trading bloc.

The Financial Times reported Wednesday that the EU and United States are closing in on a trade deal that would impose 15% tariffs on European imports, with both sides waiving tariffs on some products, including aircraft, spirits and medical devices.

The EU will continue to prepare a possible €93 billion ($109 billion) package of retaliatory tariffs, set at up to 30%, in case they cannot agree a deal by August 1, the report added.

The Commission said on Wednesday its primary focus was to achieve a negotiated outcome with the United States to avert 30% U.S. tariffs that are expected to be levied at the start of August.

Deutsche Bank reaffirms FY guidance

Back in Europe, there are more quarterly earnings from a number of the region’s senior companies to digest.

Germany’s largest lender Deutsche Bank (ETR:DBKGn) reaffirmed its full-year guidance after reporting stronger-than-expected second-quarter earnings amid solid revenue growth across client-facing businesses despite a volatile backdrop.

TotalEnergies (EPA:TTEF) reported a 23% fall in second-quarter earnings, the French oil major’s worst performance in four years, as higher upstream production failed to offset lower earnings from oil, gas, and refined fuels.

Global miner Anglo American (JO:AGLJ) reported a 13% fall in copper production in the first half of the year, and a 26% fall in rough diamonds, as demand remains sluggish.

STMicroelectronics (EPA:STMPA) reported a net loss of $97 million for the second quarter of 2025, with the French semiconductor contract manufacturer hit by hefty restructuring costs.

Italian luxury house Moncler (BIT:MONC) posted a dip in second-quarter sales as weak tourist flows weighed on otherwise robust domestic demand in the key U.S. and China markets.

BNP Paribas (OTC:BNPQY) confirmed its outlook after booking a rise in second-quarter group revenue, and the French lender says it expects revenue to accelerate in the second half of the year, driven by its Commercial and Personal Banking business.

Nestle (NSE:NEST) posted better-than-expected first-half organic sales growth on Thursday as the world’s biggest packaged food company announced a strategic review of its vitamins business that could lead to the divestment of some brands.

Across the pond, Google-parent Alphabet (NASDAQ:GOOGL) offered up strong earnings after the close Wednesday, while Tesla’s CEO Elon Musk flagged a “few rough quarters” for the electric vehicle maker after it clocked an underwhelming second quarter. 

German consumer sentiment weakens

On the economic front, German consumer sentiment is set to decline heading into August, marking the second consecutive drop, with the GfK consumer sentiment index unexpectedly falling to -21.5 points from -20.3 points the month before.

New car sales in Europe fell more than 5% in June, the European Automobile Manufacturers Association said on Thursday.

This gloomy picture faces the European Central Bank, as its policymakers get together later Thursday.

Analysts generally expect the ECB to keep its key deposit rate steady at 2%, after the policymakers agreed to cut rates by 25 basis points last month, the eighth reduction in a year.

Crude rises on decline in U.S. stockpiles

Oil prices rose Wednesday, helped by data showing a sharp decline in U.S. crude stockpiles, while investors cautiously awaited more information on trade deals to ease pressure on the global economy.

At 04:30 ET, Brent futures climbed 0.6% to $68.94 a barrel, and U.S. West Texas Intermediate crude futures rose 0.8% to $65.77 a barrel. 

Both contracts have declined for the last four sessions on concerns that a global trade war would hit energy demand.

U.S. crude oil inventories fell 3.17 million barrels last week, the Energy Information Administration said on Wednesday, far outpacing expectations of a 1.6 million-barrel draw. 

With commercial stockpiles now around 9% below the five‑year seasonal average at approximately 419 million barrels, the sharp decline signals a tightening supply balance in the market.

 

 

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