European stock markets climbed on Monday, fueled by U.S. President Donald Trump’s decision to delay imposing 50% tariffs on European Union goods. The announcement came after a weekend call between Trump and European Commission President Ursula von der Leyen, in which they agreed to extend the deadline for the tariffs to July 9.
The pan-European Stoxx 600 index rose by 0.9% as of 10:15 a.m. in London, recovering from earlier gains. All sectors remained in positive territory, signaling investor confidence following the news.
Key Market Movements
Germany’s DAX led the charge, rising 1.7% in early trade, while France’s CAC 40 increased 1.2%. However, U.K. markets were closed for a public holiday.
The European automobile sector, which is highly sensitive to trade tensions due to its reliance on exports, rebounded strongly. After suffering a 3% loss in the previous session, auto stocks gained 1% on Monday morning. Major German automakers saw notable increases:
- BMW: +1.3%
- Mercedes-Benz: +1.6%
- Volkswagen: +1.4%
Meanwhile, Zealand Pharma topped the Stoxx 600, with its shares surging 7.3%. The increase followed an optimistic note from Cantor Fitzgerald, which highlighted the stock’s undervaluation and its potential in obesity treatment developments.
Trump’s Trade Threats and the EU Response
The market rally comes after a tense few days in trade relations between the U.S. and the EU. On Friday, Trump had announced a 50% tariff on EU goods, set to take effect on June 1, citing frustrations with trade negotiations. However, during his Sunday call with von der Leyen, Trump agreed to delay the tariffs until July 9.
In a statement on social media, von der Leyen expressed optimism, saying the EU was “ready to advance talks swiftly and decisively.”
Broader Market Trends
The tariff announcement created ripples beyond Europe. In Asia, markets traded mixed on Monday. Japanese and South Korean stocks edged higher, while Chinese and Hong Kong markets experienced losses.
U.S. markets remained closed for the Memorial Day holiday. However, Friday’s trading session on Wall Street ended on a negative note, with tech stocks and Apple, in particular, bearing the brunt of investor concerns over the potential tariffs.
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