European markets showed tentative signs of recovery on Tuesday, rebounding from recent losses despite ongoing geopolitical tensions and economic uncertainties. Most major stock indexes across the continent opened slightly higher, following gains in Asia and a modest pullback in U.S. futures.
Milan’s stock exchange led the regional rally, climbing 0.80% by midday. The Italian market was boosted by strong performances from banks such as UniCredit and Intesa Sanpaolo, as well as energy major Eni and aerospace and defence firm Leonardo. In Germany, defence stocks also saw renewed investor interest, though the DAX index remained 0.13% lower.
Newly listed ThyssenKrupp Marine Systems (TKMS), which debuted in Frankfurt on Monday at around €60 per share, surged another 6.28% in morning trade. Rheinmetall AG edged up 0.48%, while BAE Systems in London slipped 0.91%. In France, shares of Airbus and Thales were steady, while Leonardo rose 0.56% following reports that the three European defence giants are planning a merger of their satellite operations.
London’s FTSE 100 gained 0.22%, supported by strength in banking and energy stocks. Utilities also attracted buyers amid the broader uptick in European trading. Paris’ CAC 40 rose 0.13%, while the pan-European STOXX 600 hovered near flat levels, reflecting investor caution.
“Wall Street’s strong session on Monday lifted sentiment globally,” said Russ Mould, investment director at AJ Bell. “Attention now shifts to upcoming U.S. interest rate decisions, corporate earnings, and the direction of trade discussions between Washington and Beijing.”
Commodity markets saw mixed movement. Gold prices fell nearly 2% by late morning, after briefly hitting a record above $4,390 per ounce. Despite the dip, the precious metal remains up roughly 60% since January, supported by safe-haven demand amid market volatility and a weakening U.S. dollar. HSBC forecasts gold could reach as high as $5,000 in 2026. Crude oil prices also inched up, with U.S. benchmark WTI trading at $57.62 a barrel and Brent crude at $60.99.
Asian markets closed broadly higher, buoyed by Japan’s political developments after lawmakers chose Sanae Takaichi as the country’s first female prime minister. Japan’s benchmark index neared the 50,000 mark, while Hong Kong’s Hang Seng rose 0.65% and Shanghai’s Composite advanced 1.36%.
Investors are now focused on key corporate earnings, with Coca-Cola, Tesla, and Procter & Gamble reporting later this week. Meanwhile, U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet later this month, raising hopes of easing trade tensions.
Market watchers are also awaiting U.S. inflation data due Friday, which will help guide the Federal Reserve’s next moves on interest rates amid the ongoing debate between tackling inflation and supporting slowing growth.
