European stocks rallied strongly on Monday, recovering losses from the previous day. The rebound came after U.S. President Donald Trump postponed his threat to impose a 50% tariff on European Union goods.
By 07:10 GMT, the pan-European Stoxx 600 index was up 1%. This followed a 0.9% drop on Friday, which came after Trump unexpectedly demanded high tariffs on EU products. He said negotiations with the EU were progressing too slowly.
Tariff Deadline Extended to July 9
On Sunday, Trump extended the deadline to impose tariffs from June 1 to July 9. This decision came after European Commission President Ursula von der Leyen asked for more time to finalize a deal. Trump agreed to the extension, easing immediate trade tensions.
Auto and Parts Stocks Lead the Recovery
The auto and parts sector, which is highly sensitive to tariff news, jumped 1.4%. Major carmakers responded with strong gains: Mercedes shares rose 2.1%, BMW 2%, and Volkswagen 1.9%.
Luxury Goods Stocks Gain Ground
Luxury goods companies, which rely heavily on the U.S. market, also saw gains. Kering, LVMH, and Richemont shares increased between 1.5% and 2.4%.
Banks and Technology Stocks Also Surge
Economically sensitive bank stocks rose by 1.5%. Technology shares led sector gains overall, climbing 1.9%.
Light Trading Volume Amid Holidays
Trading volumes were low on Monday. This was due to public holidays in both the U.S. and U.K. markets. Despite this, U.S. stock futures rose more than 1%, signaling positive investor sentiment.
Focus on Upcoming Eurozone Economic Data
Investors will watch key data releases this week. Attention is on eurozone economic sentiment figures, as well as German unemployment and inflation data for May. These reports could influence market direction in the days ahead.
In summary, European stocks recovered sharply after the U.S. delayed tariff plans on the EU. Auto, luxury goods, banking, and tech sectors led the gains. Market participants now await important economic data from the region.
