European markets edged upwards on Monday, buoyed by gains in energy and real estate stocks, even as investors assessed the potential fallout from U.S. President Donald Trump’s latest tariff warnings. With BP surging on activist investor interest and the FTSE 100 nearing record highs, market sentiment remained largely optimistic despite looming trade tensions.
The pan-European STOXX 600 rose 0.2%, supported by strong performances in oil and gas stocks, with BP increasing by 6.4% following reports that Elliott Investment Management had acquired a stake in the company. This rise helped push the FTSE 100 up by 0.4%, edging it closer to an all-time high. Real estate shares, which are particularly affected by changes in interest rates, saw an increase of over 1%, while telecom stocks recorded a rise of 0.8%. Technology stocks also saw gains, with ASML Holding advancing by 1.3%, contributing to a 0.5% increase in the sector index.
However, concerns lingered over Trump’s plan to impose a 25% tariff on all steel and aluminium imports, which sent basic resources stocks down 0.3%. Steel giant ArcelorMittal slid 2.4%, reflecting the market’s caution as European steelmakers account for around 15% of U.S. imports. German Chancellor Olaf Scholz responded by stating that Europe was ready to react swiftly should the U.S. impose trade levies against the EU.
Despite these geopolitical uncertainties, investors appeared less rattled by tariff threats than in previous years. Danni Hewson, head of financial analysis at AJ Bell, noted that markets are beginning to see such announcements as less consequential, given that many of Trump’s past tariff threats have not materialised. European Central Bank Vice-President Luis De Guindos echoed this sentiment, advocating for a measured response to trade tensions.
Meanwhile, the European Central Bank signalled on Friday that interest rates may need to be cut several times before reaching a “neutral” level, estimated between 1.75% and 2.25%. Investors have largely shrugged off concerns over trade wars in favour of strong corporate earnings, as evidenced by the STOXX 600 securing its seventh consecutive weekly gain.
Elsewhere, GTT Group fell 3.9%, making it the worst performer on the STOXX 600, after the resignation of CEO Jean-Baptiste Choimet. The company’s decline contrasted with the broader market’s upward trajectory, underscoring the impact of corporate leadership changes on investor confidence.
JPMorgan European Discovery Trust plc is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
