European markets moved higher on Tuesday, reversing course from a four-day losing streak fuelled by red-hot global tariff tensions.
The regional Stoxx 600 index was around 1.4% higher by 9:52 a.m. in London, with almost every sector and all major bourses in positive territory.
The index ended Monday’s session around 4.5% lower, marking its lowest closing level since January 2024. Key regional indices including the U.K.’s FTSE 100, the German DAX and France’s CAC 40 also all closed sharply lower.
Global equity markets have been rocked by the frequent updates around U.S. President Donald Trump’s tariffs regime in recent days as tensions between the U.S. and its trading partners do not appear to be easing.
Speculation on Monday about a potential tariff pause was quickly shut down by the White House, while Trump threatened to hike tariffs on China by another 50% unless it scrapped retaliatory duties. Beijing last week imposed a 34% tariff on American products in response to Trump announcing his full list of so-called reciprocal tariffs.
Overnight, China’s Commerce Ministry said it “resolutely opposes” Trump’s threat of escalating tariffs, and vowed to take countermeasures to safeguard its own rights and interests.
Asia-Pacific markets were however broadly higher Tuesday, rebounding previous session’s losses.
Also on Monday, European Commission President Ursula von der Leyen said the EU had offered Trump a “zero-for-zero tariffs” deal for industrial goods, and reiterated that the bloc was keen to negotiate but was also prepared to impose countermeasures.
Trump promptly rejected the deal.
U.S. stock futures were last higher after the S&P 500 extended its losses for a third day Monday in yet another volatile trading session on Wall Street.
— CNBC’s Anniek Bao contributed to this report.
European drink makers rally
A bottle of Remy Martin XO Excellence cognac at the Remy Cointreau SA headquarters Club in Cognac, France, on Dec. 9, 2016.
Bloomberg | Bloomberg | Getty Images
European alcohol producers made broad gains on Tuesday morning, after news emerged that the EU had exempted whiskey, wine and dairy products from its 25% retaliatory tariffs on U.S. goods.
Diageo, which makes Johnnie Walker, Smirnoff and Guinness, was up by around 1% at 9:47 a.m. in London, while AB InBev, the world’s largest brewer, gained 1.6%.
Carlsberg and Pernod Ricard, both up by 1%, and Remy Cointreau, up 2.5%, were also among the industry’s top movers.
— Chloe Taylor
UBS advises investors not to sell stocks
General view of the UBS building in Manhattan in New York City on June 5, 2023.
Eduardo Munoz Alvarez | View Press | Corbis News | Getty Images
In a note to clients on Tuesday, strategists at Swiss investment bank UBS argued that now is not the time to cash out of the stock market.
“Even though the market may move even lower in the near term, periods of market stress have historically and consistently offered long-term rewards for diversified investors who look through near-term volatility, stay the course, and/or put fresh money to work,” they said.
They noted that there have been 12 occasions since 1945 when the S&P 500 fell by 20% from its peak, all of which had seen the index return significant returns in the subsequent five years.
“Staying invested also reduces the risk of missing significant “up days” for financial markets, which often occur during periods of high volatility,” UBS’ strategists added.
Strong hedges in the current environment include medium-term bonds, gold, hedge funds and capital preservation, they said.
— Chloe Taylor
Defense stocks rebound from sharp sell-off
A Rolls-Royce aircraft engine on view during the Hannover Messe industrial trade fair on March 31, 2025.
Ronny Hartmann | Afp | Getty Images
Europe’s Stoxx Aerospace and Defense index gained around 4% by 9:12 a.m. in London on Tuesday.
It put the index on course to end a four-day losing streak, during which it notched single-session losses of up to 8%.
Sweden’s Saab, up 6.7%, Germany’s Renk Group, up 6.5%, and Britain’s Rolls-Royce, up 5.3%, were among the top movers in the sector on Tuesday morning.
— Chloe Taylor
Markets could stay fragile for weeks: AJ Bell
“After multiple punishing sessions, stock markets appear to have started their road to recovery,” Russ Mould, investment director at AJ Bell, said in a note on Tuesday.
However, he warned investors to take a cautious approach to the U-turn across global stock markets.
“It’s dangerous to think a massive rally will definitely happen, given how [U.S. President Donald] Trump is unpredictable, but the ‘just imagine’ thought will now be firmly engrained in investors’ minds,” Mould said.
“Investors need to take each day as it comes … markets could stay fragile for days and weeks to come. It would only take a new sign of aggression from Trump or a trading partner fighting back hard to cause upset again. Market recoveries can quickly lose momentum if investors lose faith in a remedy to the situation that caused the original sell-off.”
— Chloe Taylor
Euro moves higher
The euro was 0.4% higher against the U.S. dollar by 8:43 a.m. in London, trading at around $1.095.
The currency jumped higher in the immediate aftermath of Trump’s reciprocal tariffs announcement on Wednesday, but pared some of those gains on Monday.
— Chloe Taylor
European markets open higher
European stocks made broad gains on Tuesday, reversing course after closing sharply lower on Monday.
The pan-European Stoxx 600 was 1.3% higher at 8:16 a.m. in London. Every sector barring telecom was in positive territory, with all major bourses edging higher.
London’s FTSE 100 and the French CAC 40 each added around 1.4%, while the German DAX gained 0.8%.
— Chloe Taylor
China says it will ‘fight to the end’ after Trump threatens 50% additional tariffs
China’s Commerce Ministry said it “resolutely opposes” U.S. President Donald Trump’s threat of escalating tariffs, and vowed to take countermeasures to safeguard its own rights and interests.
The comments came after Trump said he would impose an additional 50% duties on U.S. imports from China Wednesday, if Beijing does not withdraw the 34% tariff it imposed on American products last week.
“The U.S. threat to escalate tariffs on China is a mistake on top of a mistake,” the statement said, according to a CNBC translation. “China will never accept it. If the U.S. insists on its own way, China will fight to the end.”
Read the full story here.
—Anniek Bao
Trading volume boomed as Trump’s tariffs shook stocks for a third day
Market participants traded about 29 billion shares on Monday, resulting in the highest volume day in at least 18 years, according to FactSet and Nasdaq Trader.
It was a rocky day for stocks, with the S&P 500 briefly touching bear market territory and the Dow Jones Industrial Average seeing a swing of 2,595 points from its low to the high of the session.
Monday’s volume surpassed Friday’s volume of 26.77 billion shares, as well as the 10-day average volume of 16.94 billion shares.
— Gina Francolla, Darla Mercado
