European equities saw slight gains on Tuesday, with investors looking beyond the fluctuating tariff landscape and focusing instead on the start of the corporate earnings season across Europe and the U.S.
By 07:05 GMT, Germany’s DAX index was up 0.3%, France’s CAC 40 increased by 0.2%, and the U.K.’s FTSE 100 rose 0.1%.
Earnings season takes center stage
Despite a rocky start to the week following President Donald Trump’s announcement of 30% tariffs on European Union imports effective August 1, markets in Europe began on a cautiously optimistic note.
Similar tariffs have recently been imposed on Japan, South Korea, Canada, and Brazil, raising concerns about a potential escalation into a global trade conflict.
Yet investors appear to be growing accustomed to the tariff news and are shifting their focus to the upcoming Q2 earnings reports, particularly how ongoing trade tensions might affect corporate profits.
Strong Q2 results from Ericsson
Analysts predict a slight 0.2% decline in STOXX 600 earnings for the quarter, a dip from the previous quarter’s 2.2% growth.
Still, Ericsson (NASDAQ:ERIC) surprised markets with stronger-than-expected adjusted profits in Q2, buoyed by North American sales growth and cost reduction efforts.
UK homebuilder Barratt Developments (LSE:BDEV) posted solid full-year results for 2025 despite a challenging housing market, while credit reporting firm Experian (LSE:EXPN) saw 8% organic revenue growth and reaffirmed its yearly guidance thanks to strong demand across its services.
Across the Atlantic, investors will watch second-quarter earnings from major U.S. banks such as JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), and Citigroup (NYSE:C) later in the day.
S&P 500 profits for the quarter are forecast to rise 5.8%, down from the 10.2% predicted in early April before the trade disputes intensified, according to LSEG data.
Germany’s ZEW survey and U.S. inflation report in focus
Market participants are also set to review Germany’s ZEW economic sentiment index for July and eurozone industrial output for May, looking for clues about regional economic momentum.
However, the main economic event will be the U.S. consumer price index data for June, widely watched for indications on the Federal Reserve’s next moves on interest rates.
Economists expect the CPI to show a 0.3% monthly increase in June, up from 0.1% in May, with the annual inflation rate rising to 2.6% from 2.4%.
China’s growth beats expectations, but slows slightly
Earlier reports showed China’s economy grew 5.2% year-on-year in Q2, just above forecasts of 5.1%, though slightly slower than the 5.4% growth seen in Q1.
Oil prices dip as Russian deadline eases supply concerns
Oil prices retreated Tuesday following President Trump’s announcement of a 50-day deadline for Russia to end the conflict in Ukraine and avoid sanctions, which helped ease fears of immediate supply disruptions.
At 03:05 ET, Brent crude futures fell 0.6% to $68.82 per barrel, while U.S. West Texas Intermediate futures dropped 0.7% to $66.53 per barrel.
Oil had rallied late last week amid speculation that the U.S. might impose harsher tariffs on Russia due to stalled peace talks, but the softened stance has calmed supply worries and led to selling pressure early this week.
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