European Stock Markets Open Flat Amid US-China Trade Talks

European stock markets opened flat on Monday, awaiting new trade talks between the US and China. The STOXX 600 index remained steady at 553.72 points, while tech and construction/materials stocks led declines. The US-China trade talks come after a phone call between the two countries' presidents last week. Data on US inflation and UK labor market figures will be released this week.

European stock markets opened flat on Monday, as investors awaited the outcome of new trade talks between the US and China. The STOXX 600 index remained steady at 553.72 points, with tech and construction/materials stocks leading declines [1]. The trade talks follow a phone call between US President Donald Trump and Chinese leader Xi Jinping last week, where they discussed trade measures and the resumption of rare earth mineral shipments [2]. This week will also bring data releases on US inflation and UK labor market figures, which are expected to influence market sentiment.

The US-China trade talks, scheduled to take place in London, are critical for market confidence. The talks will focus on defusing the high-stakes trade dispute that has widened beyond tit-for-tat tariffs to include export controls over goods and components critical to global supply chains [3]. The outcome of these talks will likely be key to market confidence that the worst-case scenarios from tariffs will be avoided.

The US delegation, led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer, will meet with a Chinese contingent helmed by Vice Premier He Lifeng. The talks come four days after the phone call between Trump and Xi Jinping, which briefly lowered the temperature between Washington and Beijing and fostered relief among investors [2].

Investors are closely monitoring the talks, as uncertainty around the trade dispute has been a significant driver of market volatility. The UK government, which is hosting the talks, has emphasized its support for free trade and its desire to see a resolution to the trade dispute. The UK government spokesperson noted that a trade war is in nobody's interests and welcomed the talks [3].

As the talks unfold, investors will also be watching for data releases on US inflation and UK labor market figures. These releases could provide further insight into the economic health of both countries and influence market sentiment. The US 10-Year Treasury yield, which has fallen to ~4.36%, is another indicator that investors are closely monitoring [2].

In conclusion, European markets are poised for a week of heightened volatility, with the outcome of the US-China trade talks and key data releases expected to shape market sentiment. Investors will be closely watching these developments and adjusting their portfolios accordingly.

References:
[1] https://masters.trade/en/all-news-and-analytics-from-exchanges-and-markets
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L2N3S70P1:0-us-china-trade-talks-critical-for-market-outlook/
[3] https://www.tbsnews.net/world/global-economy/key-us-china-trade-talks-set-monday-london-1162006