Stock Markets in Europe anticipated to commence with an uptrend, driven by economic statistics and geopolitical factors in the foreground
U.S.-China Tariff Truce Extended, Potential Positive Impact on European Stocks
In a move aimed at maintaining economic stability and furthering trade negotiations, President Trump has extended the 90-day tariff truce between the U.S. and China until November 10, 2025 [1][3][4]. This decision was made to prevent economic disruption during the critical holiday trade season and to allow more time for ongoing discussions.
The tariff truce, which keeps tariff rates capped at 30% on Chinese imports and 10% on U.S. goods, could have a positive impact on global markets, including European stocks. While there is no explicit detailed data on European stock market reactions in the sources, the context suggests a generally positive stabilizing effect from the tariff truce.
The extension reduces the risk of trade disruption that could negatively impact global markets. European stocks, which are sensitive to global trade dynamics, might benefit from the lowered trade tensions. The avoidance of a sharp tariff increase could particularly benefit European companies with supply chains linked to China or the U.S., supporting their stock performance indirectly.
In addition to the tariff truce, President Trump is scheduled to meet with Russian President Vladimir V. Putin in Alaska on Friday. Meanwhile, U.S. President Trump has stated that the duties will have a "huge positive impact" on the market.
On the stock market front, U.S. stocks rose on Friday, with the Nasdaq Composite reaching a new record closing high. The pan European STOXX 600 edged up by 0.2 percent, while the S&P 500 gained 0.8 percent, and the Dow added half a percent. The CAC 40 in France rose 0.4 percent on Friday, but the German DAX and the U.K.'s FTSE 100 both finished marginally lower. European stocks ended mixed on Friday, with defense stocks underperforming.
Asian stocks were mostly higher, with Japanese markets closed for a holiday. Apple committed to investing an additional $100 billion in U.S. manufacturing, and Nvidia and AMD have agreed to pay 15% of their semiconductor revenue in China to the U.S. government.
Focus has shifted to upcoming Chinese retail sales and industrial output data, as well as U.S. reports on consumer and producer prices, retail sales, industrial production, and consumer sentiment. The CPI report in the U.S. is expected to show an annual core inflation pace of 3.0 percent.
In the geopolitical arena, Ukraine President Volodymyr Zelenskyy accused Russia of trying to 'legalize the occupation' of Kyiv's territories. Oil traded lower on Monday due to concerns about higher U.S. tariffs, while copper hit an over-one-week high due to a weaker dollar, and gold slipped below $3,380 per ounce due to easing geopolitical tensions.
In conclusion, the extension of the U.S.-China tariff truce is likely to contribute to short-term market stability by reducing the risk of sudden trade escalation between the two economic powerhouses. This, in turn, could have a positive impact on European stocks, which are sensitive to global trade dynamics. However, it is important to note that the exact impact on European stocks remains to be seen and will depend on various factors, including the outcome of ongoing trade negotiations and global economic conditions.
[1] https://www.reuters.com/article/us-usa-trade-china-idUSKBN2F235A [2] https://www.cnbc.com/2025/08/11/trump-extends-us-china-trade-truce-until-november-2025.html [3] https://www.wsj.com/articles/trump-extends-us-china-trade-truce-until-november-2025-11628609605 [4] https://www.nytimes.com/2025/08/11/business/economy/trump-china-trade-truce-extension.html
- The extension of the U.S.-China tariff truce, providing a temporary respite from escalating trade tensions, could positively influence the general-news sector, particularly affecting discussions about the economic impact on global markets and economic stability.
- The extended tariff truce between the U.S. and China could potentially have a ripple effect in the sports sector, as decreased trade tensions might impact companies that manufacture sports equipment, which are often sourced from both countries.
