European stock markets rebounded on Friday, recovering from a week of losses as investors assessed ceasefire negotiations in Ukraine and ongoing trade tensions between the U.S. and EU.
As of 06:20 ET (10:20 GMT):
- Germany’s DAX rose 0.8%
- France’s CAC 40 gained 0.7%
- UK’s FTSE 100 climbed 0.5%
Despite this uptick, European stocks remain under pressure following a week of trade war concerns. The European Union recently vowed to retaliate against U.S. tariffs, prompting President Donald Trump to threaten additional duties on European exports, including a 200% tariff on champagne and spirits.
Christine Lagarde, President of the European Central Bank, warned that a full-scale trade war would have “severe consequences” for global growth and inflation.
Ceasefire Talks Provide Market Optimism
Investor sentiment improved slightly after progress in ceasefire discussions between Ukraine, the U.S., and Russia. Talks in Saudi Arabia resulted in a tentative 30-day ceasefire agreement, though Russian President Vladimir Putin requested further conditions before committing to an official resolution.
Meanwhile, economic data highlighted regional weaknesses:
- UK GDP contracted by 0.1% in January, a stark reversal from December’s 0.4% growth.
- German inflation fell to 2.6% in February, a downward revision from earlier reports of 2.8%.
These indicators suggest a fragile European economy, making markets especially sensitive to geopolitical and trade-related risks.
BMW and Oil Markets React to Economic Shifts
Corporate earnings and commodity markets also reflected broader economic challenges:
- BMW (ETR: BMWG) stock fell 1% after reporting a sharp decline in 2024 profits, citing weak demand in China and Germany, along with supply chain disruptions related to brake system issues.
- Daimler Truck (ETR: DTGGe) also posted weaker financial results, struggling with European market headwinds despite strength in its North American and bus segments.
Meanwhile, crude oil prices edged higher, reversing Thursday’s losses:
- Brent crude rose 1% to $70.61 per barrel
- WTI crude climbed 1.1% to $67.33 per barrel
The uptick followed U.S. sanctions on Iran, which targeted Oil Minister Mohsen Paknejad and Iran’s “shadow fleet” used to bypass oil trade restrictions.
