European markets regained momentum on Tuesday morning after several days of weakness. Investors cautiously pushed indexes higher despite continued geopolitical tension. Asian markets extended earlier gains, while U.S. futures edged lower.
By midday, Milan led Europe’s rebound, climbing 0.80% as UniCredit, Intesa Sanpaolo, Eni, and Leonardo all rose. In Germany, defence stocks advanced but failed to lift the DAX, which slipped 0.13%. TKMS, the newly listed submarine and warship maker, gained 6.28% after debuting in Frankfurt at €60 per share. Rheinmetall rose 0.48%, while BAE Systems in London declined 0.91%.
Airbus, Thales, and Leonardo agreed to merge satellite operations. Leonardo’s stock rose 0.56%, while the others stayed flat. London’s FTSE 100 climbed 0.22%, supported by energy and banking stocks, as utilities drew new buying interest. Paris’ CAC 40 edged up 0.13%, and the STOXX 600 remained nearly unchanged.
“Wall Street posted strong gains on Monday, and that optimism reached Europe today,” said Russ Mould, investment director at AJ Bell. “Traders now focus on U.S. interest rate cuts, corporate earnings, and renewed U.S.-China trade talks.”
Precious Metals and Oil Prices React to Global Pressures
Gold futures slipped nearly 2% by 11:45 CEST after touching a record above $4,390 an ounce. The metal has surged 60% since January, driven by geopolitical fears, economic instability, and a weaker U.S. dollar. HSBC predicts gold could reach $5,000 by 2026 as demand for safe assets persists.
Crude oil prices ticked up slightly during morning trading. U.S. benchmark crude traded at $57.62 per barrel, while Brent crude reached $60.99. Meanwhile, the euro slipped to $1.1633 from $1.1641.
Asia and the U.S. Shape Global Market Mood
In Asia, markets extended gains after lawmakers in Japan selected conservative hardliner Sanae Takaichi as the country’s first female prime minister. Japan’s benchmark index moved closer to the symbolic 50,000 mark. The U.S. dollar strengthened to 151.31 yen from 150.75, reflecting expectations that the Bank of Japan will slow interest rate hikes.
Hong Kong’s Hang Seng rose 0.65%, while Shanghai’s Composite Index advanced 1.36%. U.S. stock futures dipped slightly after Monday’s rally. Investors continued watching for signs of progress in U.S.-China relations, with speculation that Presidents Trump and Xi could meet later this month.
Analysts also expect corporate earnings from Coca-Cola, Tesla, and Procter & Gamble to guide market sentiment this week. “Companies must prove their growth after a 35% rally in the S&P 500,” said Mould. “Investors want real profits, not just inflated valuations.”
The delayed release of U.S. economic data due to the government shutdown leaves the Federal Reserve guessing. Fed officials signal more rate cuts, but inflation risks complicate their path. The government plans to release updated inflation figures on Friday, critical for Social Security cost-of-living adjustments.
As global uncertainty deepens, investors balance optimism over trade progress with anxiety about inflation, growth, and policy missteps — all while watching Europe’s fragile rebound unfold.
