European Markets Expected to Rise on Hopes of US Trade Negotiations

European stocks expected to rise slightly on hopes of trade negotiations with the US. The CAC 40 is forecast to gain 0.26%, while the Stoxx 600 is expected to rise 0.31%. The European Commission's Maros Sefcovic expressed frustration over the lack of an agreement with Washington, but said it was still possible to continue negotiations. Investors will also be monitoring US inflation data and earnings from major US banks, including JPMorgan Chase, Wells Fargo, and Citigroup.

European stocks are expected to rise slightly on Tuesday, July 8, 2025, buoyed by hopes of ongoing trade negotiations with the United States. The CAC 40 is forecast to gain 0.26%, while the Stoxx 600 is expected to rise 0.31%. This optimism comes despite President Donald Trump's recent announcement of new tariffs against the European Union and Mexico, scheduled to take effect on August 1, 2025 [1].

The European Commission's Maroš Šefčovič expressed frustration over the lack of agreement with Washington, but remains hopeful that negotiations can continue. "The EU remains confident of reaching a temporary framework agreement to avoid additional tariffs," Šefčovič told CNBC, citing a provisional deal that would see a 10% baseline tariff continue while further talks take place [2].

Investors will also be closely monitoring US inflation data and earnings from major US banks, including JPMorgan Chase, Wells Fargo, and Citigroup. The European markets have largely shrugged off the latest U.S. tariff updates, with the Stoxx Europe 600 index rising 0.3% on Monday. However, borrowing costs are climbing, with Germany's 10-year yield up more than 4 basis points at 2.65% [2].

While the Trump administration has been facing capacity issues in existing negotiations, it is unclear how much will change in the coming weeks. This uncertainty may lead to further "pauses" or sudden reversals in the tariff rates, complicating the outlook for countries that have yet to directly engage in talks [2].

References:

[1] https://www.pbs.org/newshour/politics/trump-announces-30-tariffs-against-mexico-and-european-union-beginning-aug-1

[2] https://www.cnbc.com/2025/07/08/european-markets-on-tues-july-8-stoxx-600-ftse-dax-cac-.html