European Markets Lifted by Temporary Tariff Relief
European equity markets ended Monday’s session higher following U.S. President Donald Trump’s decision to postpone the planned 50% tariffs on European Union imports from June 1 to July 9. The delay eased trade tensions and lifted investor sentiment. The pan-European Stoxx 600 index climbed around 1%, led by gains in the automotive sector. Germany’s DAX gained 1.8% and France’s CAC 40 rose 1.3%. UK markets were closed on Monday in observance of a public holiday.
U.S. Trading Paused for Memorial Day as Futures Surge
U.S. markets were closed on Monday for Memorial Day, resulting in thin trading activity globally. Despite the closure, futures for major U.S. indices jumped over 1% in early trading, spurred by optimism following the tariff delay. Dow futures rose about 1.1%, S&P 500 futures gained roughly 1.2%, and Nasdaq 100 futures led the advance with an increase close to 1.4%. Market participants now await key economic data and earnings later in the week, with trade tensions and inflation pressures remaining top concerns.
Asian Markets Tread Cautiously Amid Trade Uncertainty
Asian equities were mostly flat to slightly lower on Tuesday as investors remained wary over potential new U.S. tariffs. Japan’s Nikkei fell 0.3% after the Bank of Japan signaled possible rate hikes. South Korea’s KOSPI declined 0.5%, pressured by weakness in chipmaker shares. Markets in China and Hong Kong posted modest and mixed declines, reflecting continued caution.
European Stocks Gain on Export Optimism
European stocks posted robust gains on Monday following the U.S. tariff delay, which helped ease trade concerns and buoyed sectors reliant on exports. The Eurozone’s STOXX 50 index advanced 1.3% to close at 5,397, while the broader STOXX 600 rose 1%, supported by strong performances in major automakers including Stellantis, Volkswagen, and BMW.
Dollar Weakens Amid Fiscal and Trade Concerns
The U.S. dollar traded at five-week lows on Tuesday, with the dollar index falling below the 99 mark. Investor concerns about the U.S. fiscal trajectory and erratic trade strategies weighed on the greenback. Meanwhile, the euro climbed to a one-month high of 1.1394, supported by the postponed tariffs and debt-related apprehensions in the U.S.
Oil Prices Hold Steady Ahead of OPEC+ Decision
Crude oil prices were largely steady on Tuesday as traders awaited the outcome of the upcoming OPEC+ meeting, which was rescheduled to May 31. The group is expected to decide on a production increase of 411,000 barrels per day for July. Oil prices were also influenced by President Trump’s tariff extension and lingering uncertainty over potential new sanctions on Russia.
China’s Industrial Profits Show Modest Growth
China’s industrial profits increased by 3.0% month-on-month in April and by 1.4% year-on-year for the January-April period, reflecting early gains from recent government stimulus. Nevertheless, the recovery remains fragile as state-owned enterprises saw profits decline, global uncertainties persist, and price competition, particularly in the automotive sector, continues to pose challenges.
Stock Highlights: Movers and Shakers
Tesla Faces Significant Drop in European Sales
Tesla’s vehicle sales in Europe fell sharply in April, dropping 49% year-on-year to 7,261 units. The decline comes as the company grapples with an ageing product lineup, growing competition from European and Chinese EV makers, and public backlash against CEO Elon Musk. Despite a 27% rise in overall battery electric vehicle sales across Europe, Tesla’s market share slipped from 1.3% to 0.7%.
Chinese EV Makers Under Pressure From Price Cuts
Shares of Chinese EV makers BYD, Geely, and Nio declined sharply on Monday following BYD’s announcement of new price cuts on over 20 vehicle models. The move escalated the ongoing price war, raising concerns about mounting industry losses, supply chain instability, and long-term effects on product quality.
Pony.ai Launches Robotaxi Expansion in Dubai
Pony.ai has formed a partnership with Dubai’s Road and Transport Authority to deploy autonomous robotaxi services. The initiative aims to make 25% of city travel autonomous by 2030. Pony.ai plans to begin mass production of its seventh-generation robotaxis in late 2025 and seeks to expand globally through collaborations with leading car manufacturers.
Trump Media Refutes Crypto Fundraising Report
Trump Media & Technology Group denied a report by the Financial Times that claimed the company is seeking to raise $3 billion for cryptocurrency investments. The FT report suggested the firm was targeting $2 billion in equity and $1 billion through convertible bonds. TMTG labeled the article and its sources unreliable and did not issue further comments.
Economic Calendar: What to Watch
Investors are monitoring a number of important data releases today. In the U.S., markets await durable goods orders, housing market indicators, and consumer confidence figures—each offering insight into the country’s economic health. In Europe, focus turns to France’s EU-harmonised consumer price index and the eurozone’s Economic Confidence Index for May, both crucial for assessing inflation and business sentiment across the region.
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