European markets rose on Tuesday morning after several weeks of decline. Investors showed renewed caution amid global political uncertainty. Most major indexes in Europe opened slightly higher as Asian markets extended gains while U.S. futures slipped.
By midday, Milan’s stock exchange led the region with a 0.80% rise. UniCredit, Intesa Sanpaolo, Eni, and Leonardo all gained ground. Defence and banking shares drove Italy’s performance.
Germany’s DAX fell 0.13%, but defence stocks still posted strong results. TKMS, the newly listed shipbuilder, rose 6.28% after debuting at €60 per share on Monday. Rheinmetall added 0.48% in Frankfurt, while BAE Systems in London dropped 0.91%.
Airbus, Thales, and Leonardo confirmed plans for a satellite merger, but share prices remained steady. Leonardo’s stock rose 0.56% on the news. In London, the FTSE 100 climbed 0.22% as bank and energy shares strengthened. Utilities also gained modestly. Paris’ CAC 40 increased 0.13%, and the STOXX 600 stayed flat across Europe.
“Wall Street enjoyed a strong session Monday, and optimism carried into Asia and Europe,” said Russ Mould, investment director at AJ Bell. He added that investors now focus on potential U.S. interest rate cuts, corporate earnings, and upcoming U.S.-China trade talks.
Gold Retreats After Record High as Oil Edges Higher
Gold prices fell on Tuesday after hitting a record above $4,390 per ounce. By 11:45 CEST, prices had dropped nearly 2%. The metal has climbed 60% this year as investors seek safety amid global tensions, economic uncertainty, and a weakening U.S. dollar. HSBC expects gold to continue rising through 2026, possibly reaching $5,000 per ounce.
Oil prices inched upward. U.S. crude traded at $57.62 a barrel, while Brent reached $60.99. The euro slipped slightly to $1.1633 from $1.1641.
Asian markets finished mostly higher. Japan’s benchmark index approached 50,000 after lawmakers elected conservative leader Sanae Takaichi as the country’s first female prime minister. The yen weakened to 151.31 per dollar from 150.75. A slower pace of rate hikes by the Bank of Japan could keep the yen under pressure and limit inflation control efforts.
Hong Kong’s Hang Seng rose 0.65%, and Shanghai’s Composite Index climbed 1.36%.
Investors Track Earnings, Inflation, and U.S.-China Talks
Markets remain focused on whether President Donald Trump and President Xi Jinping will meet later this month during a regional summit. Investors hope renewed dialogue can ease trade tensions between the two largest economies.
Chinese Communist Party officials continue high-level meetings this week to set a five-year policy direction. Meanwhile, investors await corporate earnings from Coca-Cola on Tuesday, Tesla on Wednesday, and Procter & Gamble on Friday.
After the S&P 500’s 35% surge since April, companies face pressure to deliver profit growth. Investors want reassurance that valuations remain justified. Corporate reports now provide key insights into the U.S. economy, especially as the government shutdown delays official data releases.
The Federal Reserve faces a dilemma between combating inflation and supporting a weakening job market. Officials have signaled more rate cuts to spur growth, though that strategy risks fueling inflation.
The U.S. government plans to release September’s inflation data on Friday, delayed by the shutdown. The report will determine Social Security cost-of-living adjustments, but officials confirmed no other updates will occur until normal operations resume.
