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Tesla (NASDAQ:TSLA) is losing traction in the European market, with new vehicle registrations plunging 27.9% year-over-year in May, even as demand for fully electric vehicles continues to climb across the continent.

The American EV giant saw its European market share shrink to just 1.2% last month, down from 1.8% a year earlier — marking its fifth consecutive monthly decline. The downturn comes amid rising interest in lower-cost electric models from Chinese automakers and growing unease among consumers over CEO Elon Musk’s polarizing political remarks.

Industry data from the European Automobile Manufacturers Association shows overall vehicle sales in Europe rose by 1.9% in May to 1.11 million units, bouncing back after a small dip in April.

Despite recently imposed EU tariffs on Chinese-made EVs, manufacturers from China are making notable inroads. In May alone, they sold over 65,800 vehicles, nearly doubling their market share to 5.9%, according to Jato Dynamics. BYD (USOTC:BYDDY) came close to matching Tesla’s registration numbers for the month, after surpassing the U.S. company in April.

Tesla’s refreshed Model Y hasn’t yet turned the tide, as both legacy European carmakers and aggressive Chinese entrants race to expand their EV offerings amid rising trade tensions.

Among major brands, China’s SAIC Motor boosted registrations by 22.5%. German automaker BMW posted a 5.6% increase, while Japan’s Mazda suffered a sharp 23% drop.

Across the European Union, car sales are down 0.6% for the year so far. However, demand for electrified vehicles remains robust. Battery-electric registrations jumped 26.1% in May, plug-in hybrids rose 15%, and traditional hybrids gained 19.8%.

In total, 58.9% of new passenger car registrations in the EU last month were electrified — a significant leap from 48.9% a year earlier.

Looking at individual countries, Spain led the way with an 18.6% rise in new car sales, followed by Germany with a modest 1.2% gain. France and Italy saw declines of 12.3% and 0.1%, respectively. The UK posted a 1.6% uptick.

U.S. stock futures were mostly flat ahead of Wednesday’s opening bell, as investors appeared cautious following a two-day surge that pushed major indexes to their highest levels in four months.

After back-to-back strong sessions, traders seemed unwilling to commit to new positions, with futures on the Dow Jones, S&P 500, and Nasdaq showing little movement in premarket trading. The recent rally has brought the S&P 500 and Nasdaq Composite within striking distance of their record highs, prompting some to take a wait-and-see approach.

Investors are also watching developments in the Middle East, after a ceasefire between Israel and Iran was declared Tuesday—an agreement brokered by President Donald Trump.

“On the assumption that everything works as it should, which it will, I would like to congratulate both countries, Israel and Iran, on having the stamina, courage, and intelligence to end what should be called ‘THE 12-DAY WAR,’” Trump wrote on Truth Social.

Though both nations have accused each other of violating the truce, markets have reacted with optimism that the ceasefire could hold and help de-escalate tensions in the region.

Market Recap: Stocks Rally to Multi-Month Highs

Tuesday’s trading session saw stocks climb again, building on Monday’s momentum. While gains moderated slightly before the close, all three major benchmarks ended the day firmly in the green. The Nasdaq jumped 281.56 points (1.4%) to 19,912.53, the Dow Jones climbed 507.24 points (1.2%) to 43,089.02, and the S&P 500 advanced 67.01 points (1.1%) to 6,092.18.

Powell Signals Steady Course for Monetary Policy

Federal Reserve Chair Jerome Powell offered few surprises in his latest testimony before the House Financial Services Committee, stating that the central bank would remain cautious and data-driven in its approach to interest rates.

“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said in his prepared remarks.

His comments suggested the Fed is not yet ready to respond to calls from the Trump administration for rate cuts, even amid ongoing global economic uncertainty.

Consumer Sentiment Falls Unexpectedly

On the economic data front, the Conference Board reported a decline in consumer confidence for June, with its index dropping to 93.0, down from a revised 98.4 in May. Economists had forecast a modest uptick to 99.0, but the data instead showed a more cautious outlook from U.S. households.

Tech and Travel Lead the Gains

Among sectors, semiconductors led the charge, with the Philadelphia Semiconductor Index surging 3.8% to hit a five-month high. Airline stocks also performed strongly, as shown by the NYSE Arca Airline Index rising 3.6%.

Other areas of strength included computer hardware, networking, and biotechnology. In contrast, gold and oil producers underperformed, as investors shifted away from traditional safe havens amid improving risk sentiment.

European stocks slipped slightly on Wednesday, pausing after a strong rally in the previous session as a tentative ceasefire between Israel and Iran showed signs of holding.

Late Tuesday, U.S. President Donald Trump’s special envoy to the Middle East described the ongoing dialogue with Iran as “encouraging,” fueling hopes in Washington for a broader, long-term peace accord.

French Consumer Confidence Stalls

In regional data, French consumer confidence remained unchanged in June, according to figures from national statistics agency INSEE. The index held steady at 88.0, missing economists’ expectations of a small increase to 89.0 and staying well below historical averages.

Focus Turns to NATO Summit and Powell’s Testimony

Investors are turning their attention to the NATO summit later in the day, where leaders are expected to finalize commitments on defense spending. Meanwhile, Federal Reserve Chair Jerome Powell is scheduled to deliver a second day of testimony to the Senate, after emphasizing a cautious approach to interest rate policy on Tuesday.

Major Index Performance

• The UK’s FTSE 100 hovered just below the flatline.
• France’s CAC 40 slipped 0.3%.
• Germany’s DAX declined 0.4%.

Notable Movers

• Nordex shares rose 1.6% after the wind turbine manufacturer secured a new contract with renewable energy developer Umweltgerechte Kraftanlagen GmbH & Co KG.
• Automotive retailer Vertu Motors jumped 2.3% following a 7% rise in new vehicle sales over the three months ending May 31.
• Defense firm Babcock International surged 13% on strong preliminary annual results and an upgrade to its dividend and revenue outlook.
• High-tech systems provider Oxford Instruments gained 1.1% after announcing it would begin a share repurchase program by June 24, 2026.

U.S. stock futures were muted early Wednesday as investors weighed geopolitical tensions, cautious monetary signals from Federal Reserve Chair Jerome Powell, and a weaker-than-expected profit forecast from delivery giant FedEx. Oil prices edged higher but remained near recent lows as the Israel-Iran ceasefire appeared to hold.

U.S. Futures Flat Amid Geopolitical Calm

At 03:40 ET, U.S. equity futures saw limited movement:

• Dow futures rose 33 points (0.1%)
• S&P 500 futures were flat
• Nasdaq 100 futures edged up 19 points (0.1%)

The prior session saw gains on Wall Street as hopes mounted that a truce between Israel and Iran—brokered by President Donald Trump—could lead to lasting de-escalation after 12 days of cross-border strikes.

Traders are also cautiously tracking a July deadline for sweeping U.S. reciprocal tariffs, with trade tensions looming large despite investors’ relative calm. Analysts at Vital Knowledge noted that markets are pricing in “no more than a 10% baseline tariff” from ongoing trade actions.

Ceasefire Holds but Risks Remain

The ceasefire, announced by Trump on Tuesday, remained in effect despite accusations that both Israel and Iran had violated its terms shortly after it began. Trump claimed U.S. strikes had “obliterated” Iran’s nuclear facilities, though intelligence reports suggest the damage was limited and the program only delayed by months.

Trump envoy Steve Witkoff expressed optimism that talks with Iran could soon lead to a broader peace agreement. “I am very confident that we are going to achieve that,” he said in a Fox News interview.

Oil Prices Tick Up on Ceasefire Resilience

Oil prices rose modestly:

• Brent crude: +1.7% to $67.30/barrel
• WTI crude: +1.8% to $65.53/barrel

Despite the gains, crude remains near multi-week lows as hopes of de-escalation ease fears of a supply shock through the Strait of Hormuz, a vital shipping route.

Powell Reaffirms Caution on Rates

Markets now turn to Day 2 of Powell’s congressional testimony, this time before the Senate. On Tuesday, Powell emphasized the Fed’s patient stance, saying the central bank is not yet ready to adjust interest rates, citing elevated but stabilizing inflation and a solid labor market.

• May core PCE: +2.6% YoY
• Unemployment: Holding at 4.2%

Powell noted that tariffs introduced by the Trump administration pose a significant inflationary risk, urging caution in monetary policy adjustments.

FedEx Falls on Weak Outlook

FedEx (NYSE:FDX) shares slid in after-hours trading after the company issued a Q1 profit forecast below analysts’ expectations. The firm expects adjusted EPS of $3.40 to $4.00, below the consensus of $4.06, citing “volatile” global demand.

CEO Raj Subramaniam said on an earnings webcast that uncertainty stemming from trade policy—particularly the removal of duty-free treatment for low-cost shipments from retailers like Shein and Temu—was affecting business. FedEx also withheld full-year guidance, citing the “murky” global economic backdrop.

Gold prices inched higher in Asian trading on Wednesday, recovering slightly from steep losses the previous day. A softer U.S. dollar lent support, although risk appetite returned as the fragile ceasefire between Israel and Iran appeared to hold.

• Spot gold rose 0.2% to $3,329.93/oz
• Gold futures (August) gained 0.3% to $3,344.70/oz (as of 06:16 GMT)

Gold had slumped more than 1% on Tuesday after President Donald Trump announced a multi-stage ceasefire between the two Middle Eastern rivals. Though Trump later criticized both sides for violating the deal, markets are cautiously optimistic the worst of the conflict may be over.

Gold Pressured by Truce, Buoyed by Dollar Weakness

While gold’s traditional safe-haven appeal was dampened by the truce, lingering uncertainty and a weaker U.S. dollar helped stabilize prices. The Dollar Index slipped 0.1% in Asian trading, hovering near a one-week low.

Further supporting gold was speculation that recent U.S. strikes failed to neutralize Iran’s nuclear capabilities—raising the risk of renewed tensions in the future.

Federal Reserve Chair Jerome Powell added to market caution, telling Congress that the Fed remains data-dependent as it monitors the inflationary effects of U.S. tariffs.

Other Metals Gain on Softer Dollar

Broader metals saw modest gains:

• Silver futures climbed 0.5% to $35.93/oz
• Platinum futures held steady at $1,318.15/oz
• LME copper rose 0.5% to $9,723.35/ton
• U.S. copper futures were flat at $4.9015/lb

A softer dollar made commodities more attractive to international buyers, but the broader risk-on sentiment limited upside for precious metals.

The U.S. dollar edged higher early Wednesday but remained near multi-week lows as easing geopolitical tensions in the Middle East dampened demand for the safe-haven currency. At 08:20 GMT, the Dollar Index rose 0.2% to 97.665.

Markets Watch Powell’s Second Testimony

The dollar’s recent strength faded following President Donald Trump’s announcement of a ceasefire between Israel and Iran. Although both sides initially violated the truce, hostilities appeared to subside by Wednesday morning, boosting global risk appetite.

Markets now turn to Federal Reserve Chair Jerome Powell, who is scheduled to testify before the Senate—his second appearance this week. On Tuesday, Powell downplayed the urgency for interest rate cuts, citing inflation risks related to Trump’s trade tariffs. However, he acknowledged that a softening labor market and cooling inflation could justify cuts later this year.

ING analysts warned of a “sharply USD-negative scenario” if the Fed adopts a more aggressively dovish stance or if concerns grow over the Fed’s independence.

Euro and Pound Ease Slightly

• EUR/USD dipped 0.1% to 1.1599, just shy of a multi-year high. ECB Chief Economist Philip Lane noted that the central bank would only react to “material” shifts in inflation, signaling policy stability after the latest rate cut.
• GBP/USD edged down 0.1% to 1.3613, near Tuesday’s high of 1.3648—its strongest level since January 2022.

ING analysts believe the euro’s rally may stall unless new macroeconomic catalysts emerge, particularly from the U.S.

Yen Weakens, Aussie Pressured by Inflation Data

• USD/JPY rose 0.3% to 145.31, with the yen softening as Middle East tensions eased. Bank of Japan officials have also suggested holding rates steady amid uncertainty over the effects of U.S. tariffs.
• USD/CNY slipped slightly to 7.1708.
• AUD/USD fell 0.1% to 0.6495 after Australia’s headline CPI hit a seven-month low, and trimmed mean inflation dropped to a three-year low—adding pressure on the Aussie.

European markets opened slightly higher on Wednesday as investors welcomed signs of stability in the Middle East and awaited further guidance from Federal Reserve Chair Jerome Powell. As of 07:05 GMT, Germany’s DAX, France’s CAC 40, and the UK’s FTSE 100 each rose 0.2%.

Middle East Ceasefire Offers Relief

Markets found some support as a fragile ceasefire between Israel and Iran—announced late Monday by U.S. President Donald Trump—appeared to hold, despite early violations by both sides. Hopes are growing that the 12-day conflict may be nearing an end.

Attention now shifts to a NATO summit in The Hague, where allies are expected to endorse a new defense spending goal of 5% of GDP. The increase is seen as a strategic move to secure renewed U.S. commitment to the alliance.

Powell Returns to Capitol Hill

Fed Chair Jerome Powell will testify before the Senate later today, following Tuesday’s session with the House Financial Services Committee. Powell reaffirmed the Fed’s cautious stance on rate cuts, noting expectations for inflation to rise, but acknowledged that weaker economic data could accelerate a potential rate cut later this year.

Economic and Corporate Highlights

• Spanish Q1 GDP figures are due later today, but the European data calendar remains light.
• Babcock International (LSE:BAB) reported a 51% increase in statutory operating profit for FY25 and announced a £200 million share buyback for FY26, driven by growth in its Nuclear and Marine divisions.
• Tesla (NASDAQ:TSLA) saw a 27.9% drop in May vehicle registrations across the EU, EFTA, and UK, despite strong regional demand for EVs. Overall, European car registrations rose 1.9% year-on-year, with EVs outperforming while petrol and diesel sales slumped by 19.5% and 27.6%, respectively.

Oil Prices Rebound

Crude prices rebounded Wednesday following sharp losses, as easing geopolitical tensions reduced concerns over supply disruption. Brent rose 1.6% to $67.25, while WTI gained 1.7% to $65.47.

U.S. crude inventories fell by 4.3 million barrels last week, according to API data, continuing a trend that supports optimism for rising fuel demand heading into the summer. Official data from the EIA is due later today.

THG PLC (LSE:THG) reported a return to revenue growth in the second quarter of 2025, maintaining its full-year guidance. The Beauty division saw an improved performance with a smaller revenue decline than in Q1, driven by strong UK sales. The Nutrition segment experienced robust growth, with Myprotein expanding its offline retail presence globally through key partnerships across the US, Europe, and Asia. This expansion is expected to increase brand visibility and sales, despite ongoing cost pressures from elevated milk and whey prices.

THG’s outlook remains cautious due to financial challenges and weak technical indicators. While recent corporate developments demonstrate strategic progress and some financial improvement, overall financial instability and negative valuation metrics continue to weigh on the stock’s score.

More about THG

THG PLC is a global e-commerce group headquartered in Manchester, UK, operating primarily through two consumer businesses: THG Beauty and THG Nutrition. THG Beauty runs online platforms such as Lookfantastic, Dermstore, and Cult Beauty, offering access to over 1,300 third-party brands alongside its own portfolio. THG Nutrition, led by Myprotein—the world’s largest online sports nutrition brand—provides health and wellness products through direct-to-consumer and offline retail channels worldwide.

Ultimate Products PLC (LSE:ULTP) has announced a live investor presentation featuring CEO Andrew Gossage and CFO Chris Dent. The session will provide shareholders with detailed insights into the company’s strategic direction, business model, and recent financial performance. Investors can access the presentation via the Equity Development website, enhancing transparency and engagement.

The company benefits from a strong valuation and positive corporate developments, which support an elevated stock score. Although revenue growth has been somewhat volatile, solid financial results and an ongoing share buyback program contribute positively. Technical indicators show neutral momentum, balancing the overall outlook.

More about Ultimate Products PLC

Ultimate Products PLC specializes in homeware brands, including the iconic Salter—the UK’s oldest houseware brand dating back to 1760—and Beldray, established in 1872.

Babcock International (LSE:BAB) has announced strong financial results for the fiscal year ending March 2025, highlighted by notable increases in revenue and operating profit, largely driven by growth in its nuclear and marine divisions. The company has raised its medium-term outlook, boosted dividend payments, and unveiled a £200 million share repurchase plan, signaling confidence in its operational momentum and strategic foothold within the defense sector. Among its key accomplishments are securing major contract wins and advancing strategic initiatives including joint ventures and enhanced training programs, reflecting Babcock’s focus on expanding capabilities and broadening its market reach.

Despite some concerns around financial leverage, Babcock International’s outlook remains optimistic, supported by encouraging earnings guidance and positive corporate developments. Technical indicators and a reasonable valuation underpin the positive sentiment, although certain business segments face ongoing challenges that require attention.

About Babcock International

Babcock International Group PLC is a leading defense and engineering services provider, delivering essential support across marine, nuclear, land, and aviation sectors. The company specializes in tailored solutions aimed at bolstering defense readiness and energy security, serving a diverse client base that includes government agencies and commercial organizations worldwide.