European Stocks Rise as Swiss Shares Surge on Hopes of U.S. Tariff Reduction

European markets extended their gains on Tuesday as optimism grew over a possible reduction in U.S. tariffs, lifting investor sentiment across the region. The pan-European Stoxx 600 index climbed 0.5% in morning trading, with most major sectors showing positive momentum. The gains came as signs emerged that the prolonged U.S. government shutdown could soon end, boosting market confidence globally.

The U.K.’s FTSE index led European bourses, hitting a fresh record high after advancing more than 1% in early trading. Germany’s DAX edged 0.1% higher, while France’s CAC 40 rose 0.6% and Italy’s FTSE MIB added 0.5%. Investors across the continent welcomed the easing of political uncertainty in the U.S., which had weighed on global sentiment in recent weeks.

Swiss stocks outperformed peers amid optimism over a potential trade breakthrough with the United States. Reports suggested that Switzerland is nearing a deal with Washington to lower tariffs, a development that sent the country’s SMI index up 0.6% in early trade. Luxury goods makers were among the biggest winners, with Richemont gaining nearly 2%, Swatch Group up 2.8%, and Givaudan advancing 1.5%.

Corporate earnings also provided a lift to European equities. Shares of Vodafone jumped 5.5% after the telecom giant reported first-half revenues of €19.6 billion ($22.7 billion), a 7.3% increase year-on-year. The company said it plans to raise its dividend and expects to hit the upper end of its 2026 profit guidance, driven by solid growth in Germany, its largest market.

Meanwhile, the British pound weakened after data showed a slowdown in U.K. wage growth, falling 0.36% to $1.3128. Government bond yields dropped, with the 10-year gilt sliding more than four basis points to 4.419%. In the U.S., the Senate passed a bill to end the historic government shutdown, sending it to the House of Representatives for approval—a move that further fueled optimism in global markets.

source: cnbc