European markets are set for a stronger start on Wednesday as investor anxiety eased following the implementation of U.S. President Donald Trump’s universal 10% tariff, which came into effect at a lower rate than the initially threatened 15%. The decision appeared to calm global markets that had braced for a more aggressive trade move. Analysts say the lower tariff signaled a softer-than-expected shift in U.S. trade policy, helping stabilize sentiment across international exchanges.
In early projections, the FTSE 100 was expected to open 0.47% higher, while Germany’s DAX was seen trading flat. France’s CAC 40 edged 0.2% higher and Italy’s FTSE MIB gained 0.25%, according to IG data. The broadly positive outlook follows a solid close for regional bourses on Tuesday, as traders digested the evolving global trade landscape.
Corporate earnings were also in focus. Banking giant HSBC reported annual pre-tax profits of $29.91 billion, beating market expectations and adding to the upbeat tone. Investors are also watching earnings from major European companies including Iberdrola, E.ON, Diageo, Bayer and Telefonica, alongside fresh economic data such as German GDP, consumer confidence figures and euro zone inflation updates.
In his State of the Union address on Tuesday night, Trump defended his tariff strategy, arguing that tariffs paid by foreign countries could eventually replace income tax and reduce financial pressure on American households. His remarks reinforced the administration’s commitment to reshaping trade policy, even as economists debate the long-term implications for global supply chains and inflation.
Beyond Europe, global momentum appeared steady. U.S. stock futures ticked slightly higher ahead of a key earnings report from Nvidia, as investors reassessed tech valuations and heavy AI-related spending. Meanwhile, stocks in Japan and South Korea climbed to record highs overnight, signaling that, for now, global markets are choosing cautious optimism over panic in response to the latest trade developments.
source: cnbc