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European stocks up on data, tariff delay

Cautious optimism persists despite inflation and recession risks

European markets opened trading on Tuesday, May 27, 2025, with notable gains, supported by a slight improvement in German consumer confidence and the United States' postponement of new tariffs on EU imports. The European STOXX 600 index rose 0.18% to 551.44 points, while the UK's FTSE 100 index rose 0.6% to 8,771.94 points. The French CAC 40 index remained stable at 7,824.49 points, while the German DAX index added 0.12% to 24,057.40 points.

 Limited Improvement in German Consumer Confidence

A report from GfK showed that the German consumer confidence index rose by 0.9 points to -19.9 for June, driven by improved income expectations. Despite this improvement, confidence remains at low levels, as consumers continue to be cautious with spending and prefer saving, affected by volatility in financial markets, ongoing trade disputes, particularly with the United States, and the prospect of a third consecutive economic recession.

Delay of US Tariffs Boosts Sentiment

US President Donald Trump announced a postponement of the imposition of 50% tariffs on EU imports until next July, which helped calm trade concerns and support European markets. This postponement provided a positive boost to stock indices, with the German DAX and the British FTSE 100 rising to multi-month highs.

Cautious Outlook

Despite these positive developments, markets remain cautiously awaiting upcoming economic data, particularly eurozone inflation reports and the upcoming European Central Bank meeting. This data is expected to play a crucial role in determining the course of monetary policy and its impact on financial markets in the coming period.

Sources:
1- Reuters.
2- CNBC Arabia.