European Stocks Rebound After Trump Delays Tariffs on the EU

European stocks recover after Trump delays tariffs on EU, with the STOXX 600 index rising 1%. The delay in tariffs has alleviated market concerns, with the index of automakers and parts leading the gains. Defense stocks, such as Rheinmetall and Leonardo, also surged, pushing the aerospace and defense index up 1.7%. Luxury goods stocks, exposed to the US market, also advanced.

European stocks experienced a significant recovery on Monday, May 27, 2025, following the extension of a 50% tariff deadline by U.S. President Donald Trump. The STOXX 600 index rose by 1% [1] after Trump extended the deadline for tariffs to July 9, from June 1. This extension provided much-needed relief to European markets, which had been rattled by the initial threat of the tariffs.

The automobiles and parts index, which is particularly sensitive to tariff-related pressures, rebounded by 1.4%. Key players such as Mercedes, BMW, and Volkswagen saw their stocks gain 2.1%, 2%, and 1.9% respectively. Luxury goods stocks, which are highly exposed to the U.S. market, also advanced. Shares of Kering, LVMH, and Richemont rose between 1.5% and 2.4% [1].

Defense stocks, such as Rheinmetall and Leonardo, surged, pushing the aerospace and defense index up by 1.7%. The banking sector, which is economically sensitive, also saw a gain of 1.5%. Meanwhile, technology stocks led the gains among sectors, rising by 1.9% [1].

The Spanish IBEX 35 index, which tracks the performance of the 35 largest companies listed on the Madrid Stock Exchange, rose by 0.86%, or 121.20 points, to 14,225.30 [2]. The FTSE Eurofirst 300 index, which is a benchmark for the performance of the largest European companies, advanced by 0.81%.

Investors are now turning their attention to key economic indicators for the week, including euro zone economic sentiment, German unemployment and inflation figures for May, and consumer confidence data from Germany and the U.S. [2].

The extension of the tariff deadline has alleviated market concerns, providing a much-needed boost to European stocks. However, the market remains cautious, as the outcome of trade negotiations between the EU and the U.S. remains uncertain.

References:
[1] https://www.financialexpress.com/world-news/stoxx-600-jumps-after-trump-extends-50-eu-tariff-deadline/3857705/
[2] https://www.marketscreener.com/quote/index/IBEX-35-7629/news/IBEX-35-Rises-After-Trump-Delays-Tariffs-on-the-EU-50062369/