European equity markets slipped on Tuesday as trade friction between the EU and the U.S. cast a shadow over investor confidence, with corporate earnings continuing to pour in.
At 07:02 GMT, Germany’s DAX and France’s CAC 40 each fell 0.2%, while the U.K.’s FTSE 100 remained mostly flat.
Investor sentiment remains fragile following U.S. President Donald Trump’s earlier announcement that a 30% tariff on EU imports will take effect on August 1. Talks are ongoing, but with no clear resolution in sight, the clock is ticking. The EU has reportedly pushed for a 10% baseline tariff, though The Wall Street Journal noted that U.S. officials now want 15% or more, creating further friction.
In response, Germany and other EU nations are reportedly considering broad “anti-coercion” measures that could target U.S. services if the EU cannot strike a deal, according to Reuters, citing EU diplomatic sources.
Earnings Season Keeps Investors Busy
As trade concerns simmer, attention is also fixed on Q2 corporate results. With the euro having jumped 9% in Q2, investors are watching closely for signs of margin pressure among exporters.
- Lindt & Spruengli (TG:LSPN) raised its full-year organic sales growth forecast to 9–11%, up from 7–9%, citing continued demand for premium chocolates.
- Norsk Hydro (TG:A2R0MA) reported a 33% jump in Q2 core profit, buoyed by stronger aluminium and energy prices.
- Julius Baer (TG:JGE) disappointed investors with a 35% year-over-year drop in first-half net income, blaming higher loan loss provisions and a charge from the sale of its Brazilian wealth unit.
- Mitie Group (LSE:MTO) posted a 10.1% year-on-year rise in Q1 FY26 revenue, driven by new contract wins, project delivery, and pricing momentum.
Eyes on the ECB
The macroeconomic calendar is light for Europe today, but all attention turns to Thursday’s ECB policy meeting. Analysts broadly expect the European Central Bank to hold its deposit rate at 2%, following a 25-basis-point cut in June, the ECB’s eighth in 12 months.
While that cut was motivated by weakening inflation and subdued economic activity in the eurozone, the ECB has signaled a likely pause in July, as trade tensions and macro uncertainty continue to cloud the outlook.
Oil Prices Retreat
Crude prices edged lower amid growing fears that a transatlantic trade war could dent global growth and energy demand.
At 03:02 ET, Brent crude dropped 0.4% to $68.94 per barrel, while U.S. WTI futures also slipped 0.4% to $65.67. Both benchmarks had posted marginal losses on Monday.
With U.S. tariffs on EU goods set to hit on August 1, markets remain on edge. The White House has described that date as a “hard deadline”, raising the stakes for ongoing negotiations.
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