European markets opened higher on Tuesday, recovering after recent weakness amid ongoing geopolitical tensions. Most indexes in Europe rose cautiously after Asian stocks extended gains, while U.S. futures dipped slightly.
By midday, Milan led European exchanges, climbing 0.80%. Banking giants UniCredit and Intesa Sanpaolo, energy producer Eni, and aerospace firm Leonardo all boosted Italy’s market performance.
Germany’s defence sector supported modest gains, although the DAX index still slipped 0.13%. Submarine and warship manufacturer TKMS surged again after its strong debut in Frankfurt on Monday. The company opened at €60 a share and gained 6.28% during morning trading. Rheinmetall added 0.48%, while BAE Systems in London fell 0.91%.
Airbus, Thales, and Leonardo reportedly agreed to merge their satellite divisions, though most share prices stayed steady. Leonardo shares rose 0.56% following the announcement.
London’s FTSE 100 edged up 0.22%, supported by bank and energy stocks. Utility shares also saw strong demand. The STOXX 600 index held flat, while Paris’ CAC 40 rose slightly by 0.13%.
“Wall Street’s strength on Monday lifted sentiment in Asia and Europe,” said Russ Mould, investment director at AJ Bell. “Markets now focus on U.S. rate cuts, earnings season, and U.S.–China trade talks.”
Commodities Slip as Gold Retreats from Record High
Gold prices dropped after hitting a record above $4,390 per ounce earlier in the day. By 11:45 CEST, gold futures had fallen nearly 2%. The metal’s value has soared 60% since January due to safe-haven demand amid global instability, economic uncertainty, and a weakening U.S. dollar. HSBC expects gold to reach $5,000 by 2026.
Oil prices ticked higher on Tuesday morning. The U.S. benchmark traded at $57.62 a barrel, while Brent crude reached $60.99. The euro weakened slightly to $1.1633 against the dollar, down from $1.1641.
Asian Gains and U.S. Outlook Shape Market Mood
Asian markets extended their rally, driven by optimism following Japan’s political shift. Japan’s benchmark index neared the 50,000 mark after lawmakers elected Sanae Takaichi, the country’s first female prime minister. Investors expect her to slow Bank of Japan rate increases, keeping the yen weak. The dollar climbed to 151.31 yen from 150.75.
Hong Kong’s Hang Seng gained 0.65%, and Shanghai’s Composite index advanced 1.36%. U.S. futures traded slightly lower after Monday’s strong rally.
Investor sentiment improved as expectations grew for a meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this month. Hopes of easing trade tensions between the two largest economies lifted global confidence.
Chinese Communist Party leaders also met this week to set their five-year economic strategy, adding to investor attention.
Traders now await corporate earnings from major U.S. companies. Coca-Cola reports Tuesday, Tesla on Wednesday, and Procter & Gamble on Friday. Analysts expect results to reveal whether profits can sustain recent market rallies.
The U.S. government’s shutdown has delayed key economic data, forcing investors to rely on corporate earnings for clues about growth. The Federal Reserve continues debating rate cuts to counter a slowing job market without worsening inflation.
The government plans to release updated inflation figures on Friday. The Social Security Administration depends on the report to calculate cost-of-living adjustments. Officials confirmed that no additional data releases will resume until regular government operations restart.
