European Stocks Rise Amid Earnings Strength, US Tariff Risks

European stocks showed resilience in mid-2025 despite ongoing trade tensions and tariff threats from U.S. President Donald Trump, who announced potential hikes on European goods up to 35% and 100% tariffs on chip exports, with exemptions for companies investing in the U.S. The STOXX 600 edged higher, supported by solid corporate earnings and positive guidance, although some sectors like energy and certain industrials faced headwinds. Market optimism is tempered by concerns over new U.S. tariffs on Swiss goods and pharmaceutical imports, as well as expectations for interest rate cuts by the Bank of England and the Federal Reserve. The European technology sector has been a standout performer, benefiting from strong demand for AI infrastructure and digital transformation, partially alleviated by a U.S.-EU trade agreement capping tariffs at 15%. Asian markets and U.S. futures also rose following announcements of tariff carveouts, especially for chip manufacturers like Apple, Nvidia, and Taiwan Semiconductor, helping to calm investor nerves. Overall, investors are balancing cautious optimism from earnings strength with uncertainty regarding U.S. trade policy and central bank actions, which continue to influence global equity and bond markets.