European stock markets rallied Monday after U.S. President Donald Trump announced a delay in the imposition of 50% tariffs on European Union goods, postponing the decision until July 9 to allow for further negotiations.
The announcement followed a tense few days, during which Trump had unsettled markets by threatening to implement the steep tariffs starting June 1, citing stalled trade talks. He also warned of 25% tariffs on smartphones not manufactured in the United States, further rattling investors.
However, markets found relief after Trump revealed on Sunday that he had a “very nice call” with European Commission President Ursula von der Leyen and agreed to delay the tariff decision. He said officials from both sides would “rapidly get together and see if we can work something out.” Von der Leyen echoed the sentiment, promising to move “swiftly” toward a resolution.
In response, the Paris CAC 40 rose 1.2% in midday trading, while Germany’s DAX index gained 1.7%. Trading in London and New York remained closed due to public holidays, but U.S. futures moved higher, even as Asian markets struggled.
Analysts pointed to Trump’s unpredictable policy swings as a source of persistent volatility.
“The market dances to Trump’s tune — a threat, a retreat, and then a rebound,” said Jochen Stanzl, chief market analyst at CMC Markets. “This latest move reinforces what investors now call the ‘Trump Pattern’ — a rollercoaster that risk-tolerant traders are learning to ride.”
Meanwhile, the U.S. dollar stayed under pressure after Friday’s drop, and long-term Treasury yields surged last week amid concerns over Trump’s fiscal policy agenda, which includes tax cuts and spending reductions that could increase national debt.
Investors are now watching closely for Wednesday’s release of the Federal Reserve’s May meeting minutes and Friday’s U.S. personal consumption expenditures (PCE) report, the Fed’s preferred inflation gauge.
In corporate news, Samsung shares in Seoul rose nearly 1% despite the looming smartphone tariff threat. Nippon Steel in Tokyo surged up to 7.4% before closing 2.1% higher after Trump backed a proposed $14.9 billion partnership with U.S. Steel, which he claimed would create 70,000 jobs and add $14 billion to the U.S. economy. U.S. Steel shares had jumped 21% in New York trading on Friday, though details of the deal remain unclear.
Key Market Data (as of 10:10 GMT):
- Paris – CAC 40: ▲ 1.2% at 7,825.93
- Frankfurt – DAX: ▲ 1.7% at 24,026.76
- Tokyo – Nikkei 225: ▲ 1.0% at 37,531.53 (close)
- Hong Kong – Hang Seng: ▼ 1.4% at 23,282.33 (close)
- Shanghai – Composite: ▼ 0.1% at 3,346.84 (close)
Currencies:
- Euro/Dollar: ▲ $1.1384
- Pound/Dollar: ▲ $1.3563
- Dollar/Yen: ▲ 142.84
- Euro/Pound: ▼ 83.93 pence
Commodities:
- WTI Crude: ▼ 0.1% at $61.49/barrel
- Brent Crude: ▼ 0.1% at $64.16/barrel
Note: London and New York stock markets were closed for public holidays.