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(Bloomberg) — European equities snapped a two-day losing streak on Thursday as investor confidence was boosted by a US-UK trade deal announced by US President Donald Trump.
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The Stoxx Europe 600 Index rose 0.4% by the close in London. Most notably, the Euro Stoxx 50 rose to the highest closing level since April 2, Trump’s Liberation Day. Cyclical stocks such as industrials, technology, travel, retail and banks led the rally, while defensive equities such as utilities, health care and real estate were the biggest laggards on the day.
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Chip stocks including ASML Holding N.V. rallied on a report that the White House plans to rescind some Biden-era curbs. Siemens Energy AG gained 3.3% after it said the impact of tariffs was going to be limited.
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Hopes for a de-escalation of trade tensions were fueled as Trump said in the Oval Office he was “thrilled to announce that we’ve reached a breakthrough trade deal with the United Kingdom.” Full details of the pact would still be negotiated over the coming weeks, he said.
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Under the agreement, the UK would fast-track American goods through their customs process and reduce barriers on agricultural, chemical, energy and industrial exports. UK stocks with US exposure, including Rolls Royce Holdings Plc. and Diageo Plc., gained.
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Yet, a European Union proposal outlined hitting €95 billion ($108 billion) of US exports with additional tariffs if ongoing trade talks with the US administration were to fail.
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The deal with the UK “is good news in terms of sentiment, but the reality is probably more complicated,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “My feeling is that we’re currently in the eye of the storm. I expect margins and EPS to ultimately take a hit.”
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Broader sentiment was also buoyed by the Federal Reserve’s reassurance on the state of the economy Wednesday as it held rates steady.
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“Powell gave a clear, consistent, if somewhat hawkish message yesterday, which keeps the credibility of the US Fed high and reassures investors,” said Thomas Wille, chief investment officer at Copernicus Wealth Management.
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European stocks have clawed back most of their declines following Trump’s reciprocal tariff announcement on April 2, with his reversals and reprieves coming in a relatively upbeat earnings season.
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For more on equity markets:
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- Nascent UK Revival Could Gain Wings With BOE Boost: Taking Stock
- M&A Watch Europe: Sabadell, BBVA, Millennium, Prosus, BPER
- Germany Kicks Off 2025 IPOs With Pair of Small Deals: ECM Watch
- US Stock Futures Fall; Fluence Energy, Genpact, Fortinet Fall
- BAE Benefits: The London Rush
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—With assistance from Michael Msika.
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English (US)