- European stock markets inched higher on Tuesday after Monday’s slump
European stock markets rebounded on Tuesday morning after falling in the previous session, as investors weighed the implications of the US-EU trade deal.
The STOXX Europe 600 jumped 0.6 per cent by midmorning, as France’s CAC 40 and Germany’s DAX added around 1 per cent each, aided by encouraging corporate updates. The FTSE 100 was up 0.2 per cent.
However, weakness in the single market currency continued.
Stocks on this side of the Atlantic gave up early gains on Monday and the Euro tumbled as the US-EU trade deal was branded a ‘humiliation’ for Brussels.
The single currency fell more than 1 per cent against the dollar towards $1.16 as investors bet the agreement would hurt the European economy.
Stock markets also slammed into reverse after an initial rally with the Dax closing down 1 per cent in Frankfurt and the Cac falling 0.4 per cent in Paris.
In London, the FTSE 100 fell 0.4 per cent, or 38.87 points, to 9081.44. By contrast, the Nasdaq and S&P 500 hit record highs in New York.
‘It’s great they’ve made a deal, but beyond the noise it is still a worsening in trade relations, not an improvement,’ said Trevor Greetham at Royal London Asset Management.
Danni Hewson at AJ Bell added: ‘Any questions about who gains the most from the US-EU trade deal seem to have been answered by markets with both the S&P 500 and Nasdaq hitting record highs with European markets looking a lot more subdued.’
Tariffs: US President Donald Trump hailed ‘the biggest deal ever made’ while European Commission chief Ursula von der Leyen was forced to admit it was ‘the best we could get’
Under the lopsided agreement struck between US President Donald Trump and European Commission chief Ursula von der Leyen, most EU exports to the US will face a 15 per cent tariff.
While this was lower than the 30 per cent threatened by the White House, it is higher than the 10 per cent secured by Brexit Britain and ten times the 1.5 per cent levy that was in place before Trump launched his trade war.
Analysts warned the deal poses a big threat to European exporters, who shipped £450billion of goods to the US last year including cars, wine and medicines.
US exports to the EU – which totalled £275billion in 2024 – will not face extra tariffs.
The EU also agreed to invest an extra £450billion in the US –including on American military equipment – and spend more than £550billion on energy.
Trump hailed ‘the biggest deal ever made’ while von der Leyen was forced to admit it was ‘the best we could get’ as she faced a fierce backlash across Europe.
Clemens Fuest, president of the Munich-based IFO economic research institute, said: ‘The trade deal is a humiliation for the EU, but it reflects the imbalance of power.
‘The Europeans need to wake up, focus more on economic strength and reduce their military and technological dependence on the US.’
French entrepreneur Arnaud Bertrand, who sold his House Trip business to TripAdvisor, described it as ‘a massive one-way transfer of wealth with no reciprocal benefits’.
He said: ‘The EU gets nothing. This is Europe’s century of humiliation.’
By contrast, Business Secretary Jonathan Reynolds said there was ‘absolutely no doubt’ Britain was able to secure lower tariffs of 10 per cent due to Brexit.
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