European stock markets gained momentum Thursday amid rising optimism over a potential trade agreement between the U.S. and the European Union. Investors also digested fresh corporate earnings reports ahead of a key European Central Bank policy meeting.
By 08:30 GMT, Germany’s DAX index had advanced 1.1%, France’s CAC 40 rose 0.4%, and the U.K.’s FTSE 100 increased 0.8%.
Trade deal optimism fuels markets
Global market sentiment received a lift earlier this week following the U.S.-Japan trade deal announcement, raising expectations that Washington may soon finalize a similar pact with the EU, a significant trading partner.
According to the Financial Times on Wednesday, the EU and U.S. are close to an agreement that would set tariffs on European imports at 15%, with both sides exempting certain products such as aircraft, spirits, and medical devices from tariffs.
The EU is simultaneously preparing a retaliatory tariff package potentially worth €93 billion ($109 billion), with rates up to 30%, should no deal be reached by August 1, the report stated.
The European Commission emphasized on Wednesday its priority remains to secure a negotiated settlement with the U.S. to avoid the 30% tariffs expected to take effect in early August.
Corporate earnings highlight regional challenges
Back in Europe, quarterly earnings continued to command attention, revealing mixed performances among major firms.
Deutsche Bank (TG:DBK) reaffirmed its full-year outlook after posting better-than-expected Q2 profits, supported by steady revenue growth across client businesses despite a volatile market environment.
French energy giant TotalEnergies (EU:TTE) reported a 23% drop in Q2 earnings, marking its weakest quarter in four years, as increased upstream output failed to compensate for lower returns from oil, gas, and refined products.
Mining heavyweight Anglo American (LSE:AAL) disclosed a 13% decline in copper output and a 26% drop in rough diamond production for the first half of the year amid subdued demand.
STMicroelectronics (NYSE:STM) posted a $97 million net loss for Q2 2025, citing heavy restructuring expenses as a significant drag.
Italian luxury brand Moncler (BIT:MONC) saw a slight decline in Q2 sales, affected by reduced tourist activity despite strong domestic demand in key U.S. and Chinese markets.
French bank BNP Paribas (EU:BNP) confirmed its outlook after a revenue increase in Q2, expecting growth acceleration in H2 driven by its Commercial and Personal Banking division.
Nestlé (TG:NESR) reported better-than-expected first-half organic sales growth and announced a strategic review of its vitamins segment, potentially leading to divestments.
Across the Atlantic, Alphabet (NASDAQ:GOOGL), Google’s parent company, delivered strong earnings after Wednesday’s market close, while Tesla (NASDAQ:TSLA) CEO Elon Musk warned of “a few rough quarters” after the electric vehicle maker reported a disappointing Q2.
German consumer confidence dips
On the economic front, German consumer sentiment is projected to weaken further in August, marking a second straight monthly decline. The GfK consumer confidence index unexpectedly dropped to -21.5 from -20.3 in July.
Additionally, new car sales across Europe fell more than 5% in June, according to the European Automobile Manufacturers Association on Thursday.
These indicators set the stage for the European Central Bank’s meeting later in the day, where policymakers are widely expected to hold the deposit rate steady at 2%, following a 25 basis point cut last month — the eighth reduction in 12 months.
Oil prices gain on U.S. inventory drop
Oil prices climbed on Wednesday after data revealed a steep decline in U.S. crude inventories, while investors awaited further updates on trade negotiations to gauge their impact on the global economy.
At 04:30 ET, Brent crude futures rose 0.6% to $68.94 per barrel, and U.S. West Texas Intermediate futures increased 0.8% to $65.77 per barrel.
Both benchmarks had fallen over the previous four sessions amid concerns that escalating trade tensions could hurt energy demand.
The Energy Information Administration reported a 3.17 million-barrel drawdown in U.S. crude stockpiles last week, significantly exceeding forecasts of a 1.6 million-barrel decline.
With commercial crude stocks approximately 9% below the five-year seasonal average at around 419 million barrels, this sharp decrease signals a tightening supply landscape.
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