European Stocks Rebound 1.1% Amid Tariff Uncertainty

European stocks have halted a four-day losing streak, with investors closely monitoring the potential impact of U.S. tariffs. The STOXX 600 index closed 1.1% higher in London, driven by gains in technology and industrial sectors, as well as automotive and mining stocks, which have significant exposure to the upcoming tariffs. Media stocks, however, experienced a decline.

White House Press Secretary Karoline Leavitt announced that U.S. President Trump will reveal retaliatory tariffs during an event at the White House Rose Garden on Wednesday. These tariffs are expected to be tailored to each country, adding to the uncertainty in the market.

Despite the first quarter's optimism surrounding increased fiscal spending and improved economic outlook, which drove the STOXX 600 index to outperform the S&P 500 index, investor sentiment has shifted towards caution due to rising concerns about the impact of tariffs. Strategists predict that the market will remain in a holding pattern until the tariff policies are announced on Wednesday.

Joachim Klement, a strategist, noted that both the UK and the EU are likely to be affected by the tariffs, but the UK might receive some relief later due to its more balanced trade relationship with the U.S. This could potentially benefit the UK economy and stock market, but more clarity is needed after the announcement on Thursday.

Sharon Bell, a strategist at a prominent investment bank, has lowered the target for the STOXX 600 index, citing the assumption of higher tariffs and a potential slowdown in economic growth. The uncertainty surrounding the tariff policies has led to a more cautious approach from investors, who are holding back on significant investment decisions until more clarity is provided.

The market is also bracing for potential retaliatory measures from other countries, which could further complicate the situation. The lack of clear communication from the U.S. administration has left traders uncertain about the extent and timing of the tariffs, leading to a more cautious market environment. Investors are closely monitoring the developments and awaiting clearer details from the administration.