European stock markets rallied on Monday, due to U.S. President Donald Trump’s decision to postpone 50 percent tariffs on European Union goods until July 9, extending the timeline for trade negotiations.
The move followed a turbulent Friday when Trump’s threat to impose the tariffs from June 1 sent markets into a tailspin, citing stalled negotiations. The Paris CAC 40 climbed 1.2 percent by midday, while Frankfurt’s DAX surged 1.7 percent. Markets in London and Wall Street were closed for holidays, though U.S. futures pointed upward.
The reprieve came after what Trump described as a “very nice call” with European Commission President Ursula von der Leyen on Sunday. He announced the tariff delay, signaling that negotiators would “rapidly get together” to seek a resolution.
Von der Leyen responded promptly, pledging to act “swiftly” to secure a deal. The development eased fears of an immediate trade war, offering a temporary boost to investor confidence.
However, Trump’s broader trade rhetoric continued to unsettle markets. Alongside the EU tariff threat, he warned of 25 percent tariffs on smartphone manufacturers unless they produce handsets in the U.S., a move that could disrupt global supply chains. Shares in Seoul-listed Samsung, a leading smartphone maker, rose nearly 1 percent despite the looming threat, reflecting cautious optimism.
Analysts highlighted the volatility driven by Trump’s unpredictable policy shifts. “The stock market seems to dance to Trump’s tune,” said Jochen Stanzl, chief market analyst at CMC Markets. “First a threat, then a pullback, followed by a rebound as investors anticipate concessions. This ‘Trump Pattern’ is becoming a playbook for risk-tolerant traders.” The dollar, meanwhile, remained under pressure after Friday’s slide.
Beyond trade, investors are grappling with concerns over Trump’s economic agenda. His tax relief and spending cuts plan, recently passed by the House, has sparked fears of surging U.S. debt, pushing long-term government bond yields higher last week.
Attention now turns to the Federal Reserve’s May meeting minutes, set for release on Wednesday, and the U.S. personal consumption expenditures data on Friday, both critical for assessing the Fed’s stance on inflation and economic growth.
In corporate developments, Tokyo’s Nippon Steel soared as much as 7.4 percent, closing 2.1 percent higher, after Trump endorsed a “partnership” with U.S. Steel. The announcement ties into Nippon Steel’s $14.9 billion bid to acquire U.S. Steel, first proposed in 2023.
Trump claimed the deal would preserve U.S. Steel’s Pittsburgh headquarters, create 70,000 jobs, and add $14 billion to the economy. U.S. Steel’s shares skyrocketed 21 percent in New York on Friday. Yet, details of the partnership remain scarce, leaving investors and analysts seeking clarity on its structure and implications.
Major market and currency rates at approximately 10:10 GMT:
Paris—CAC 40: Rose 1.2% to 7,825.93 points
Frankfurt—DAX: Gained 1.7% to 24,026 points
Tokyo – Nikkei 225: Increased 1.0% to 37,531.53 (close)
Hong Kong—Hang Seng Index: Fell 1.4% to 23,282.33 (close)
Shanghai Composite: Dipped 0.1% to 3,346.84 (close)
Euro/Dollar: Climbed to $1.1384 from $1.1369 on Friday
Pound/Dollar: Advanced to $1.3563 from $1.3535
Dollar/Yen: Edged up to 142.84 yen from 142.57 yen
Euro/Pound: Slipped to 83.93 pence from 83.96 pence
West Texas Intermediate: Dropped 0.1% to $61.49 per barrel
Brent North Sea Crude: Decreased 0.1% to $64.16 per barrel
New York—Dow: Closed for holiday
London—FTSE 100: Closed for holiday
WHAT YOU SHOULD KNOW
Trump Delays EU Tariffs: U.S. President Donald Trump postponed 50% tariffs on EU goods until July 9, 2025, to allow more time for trade negotiations, following a “very nice call” with European Commission President Ursula von der Leyen, who vowed to act “swiftly” to reach a deal.
Market Response: European stock markets rallied, with Paris’s CAC 40 up 1.2% and Frankfurt’s DAX up 1.7%. U.S. futures rose, though Wall Street and London markets were closed for holidays.
Economic Concerns: Investors are worried about Trump’s tax relief and spending cuts plan, passed by the House, potentially increasing U.S. debt, which drove up U.S. bond yields last week.
Market Volatility: Analysts note a “Trump Pattern” of threats, pullbacks, and rebounds, creating a volatile but potentially profitable environment for risk-tolerant investors.
Upcoming Economic Indicators: Investors await the Federal Reserve’s May meeting minutes (Wednesday) and U.S. personal consumption expenditures data (Friday) to gauge the Fed’s stance on inflation and the economy.
ALSO READ TOP STORIES FROM VERILY NEWS
