European stock markets bounced back on Wednesday following indications from a top US official that President Donald Trump may scale back hefty tariffs on Canada and Mexico. This renewed optimism lifted major indices, with Germany’s market seeing an additional boost from anticipated government spending plans.
Paris saw a 1.3% increase, while Milan climbed 1.4%. London’s FTSE 100 posted a 0.5% gain. Frankfurt led the charge with a more than 2% surge, spurred by expectations that Germany’s likely next chancellor, Friedrich Merz, will inject billions into defence and infrastructure projects.
Tuesday’s session had seen markets slump after Trump’s tariffs on Mexico, Canada, and China took effect, prompting retaliatory moves and concerns that the European Union could be next in line. However, US Commerce Secretary Howard Lutnick signalled a possible compromise, suggesting Trump might ease restrictions on Canadian and Mexican goods while maintaining a strong stance.
This shift in sentiment encouraged investors, driving gains across European exchanges. If a resolution is reached, markets could see further upside as trade tensions ease.
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.
