European Stocks Rebound as Traders Monitor U.S.-China Trade Tensions and French Political Moves
European markets opened higher on Wednesday, recovering from a two-week low as investors weighed renewed tensions between the United States and China alongside key political developments in France. The rebound reflected cautious optimism across the continent, with London’s FTSE 100 expected to climb 0.37%, Germany’s DAX up 0.4%, France’s CAC 40 rising 1.72%, and Italy’s FTSE MIB gaining 0.6%, according to early data from IG.
The shift in sentiment comes after a turbulent Tuesday, when stocks across Europe slid amid fears of a potential escalation in the U.S.-China trade dispute. The downturn followed U.S. President Donald Trump’s threats to impose new tariffs on China, aiming to “financially counter” Beijing’s recent export restrictions on rare earth minerals—critical components in technology manufacturing and green energy industries.
Tensions deepened on Tuesday when Trump accused China of halting soybean purchases, describing it as an “economically hostile act.” He further warned of potential retaliatory measures, including a possible embargo on cooking oil imports. The comments added to global market jitters, though Asia-Pacific markets showed resilience overnight, trading mostly higher. U.S. stock futures, however, remained largely unchanged following a volatile session on Wall Street.
In France, political uncertainty also drew investor attention. Prime Minister Sebastien Lecornu announced the suspension of the controversial pension reform until after the 2027 election — a key policy of President Emmanuel Macron’s administration. The move was welcomed by the Socialist Party, which pledged to back Lecornu’s government ahead of confidence votes expected on Thursday. The decision aims to ease social tensions that have sparked protests and divided the country for months.
Globally, investors are keeping a close watch on the ongoing International Monetary Fund (IMF) and World Bank annual meetings in Washington. The gatherings bring together central bankers, finance ministers, private sector leaders, and economists to discuss pressing global economic challenges, from inflation control to sustainable growth and poverty reduction. With markets reacting to every signal on policy and trade, Wednesday’s uptick in European stocks reflects a fragile balance between optimism and caution in the global economy.
source: cnbc