European Markets Turn Cautious as Earnings Take Center Stage Over Tariff Fears

Investor sentiment across European markets shifted on Thursday, as attention moved away from global tariff tensions and toward a packed schedule of corporate earnings reports. After a week dominated by trade uncertainty following tariff announcements from Donald Trump, traders are now focusing on how major European companies are performing — and what that means for the region’s economic outlook.

Market openings reflected this cautious mood. The U.K.’s FTSE 100 and France’s CAC 40 were expected to open flat, while Germany’s DAX and Italy’s FTSE MIB were projected to edge slightly lower. Investors are bracing for updates from some of Europe’s biggest firms, including Deutsche Telekom, Allianz, AXA, Munich Re and Stellantis.

Among early earnings movers, German sportswear giant Puma reported a challenging year. The company revealed a 13.1% decline in full-year earnings for 2025, citing the impact of its recent strategic reset. Puma posted an operating loss of €357.2 million, a sharp reversal from the previous year’s €548.7 million profit. The company also confirmed it would cancel dividend payouts for 2025 as it navigates weaker sales and shrinking profit margins.

On a more optimistic note, British engineering powerhouse Rolls-Royce delivered stronger-than-expected results. The company reported a 40% jump in profits for 2025 and projected earnings exceeding £4 billion in 2026 — signaling resilience in parts of Europe’s industrial sector despite ongoing global trade tensions.

While markets remain wary of the long-term effects of U.S. trade policies, relief has emerged after the implementation of a 10% tariff instead of the previously feared 15%. With Asia-Pacific markets gaining overnight and U.S. investors reacting to earnings from Nvidia, European traders are increasingly shifting focus to corporate fundamentals as a clearer indicator of market direction in the weeks ahead.

source: cnbc