European markets opened with strong gains on Tuesday, bouncing back from a four-day losing streak driven by escalating global tariff tensions. The pan-European Stoxx 600 index rose around 1% shortly after the opening bell, with all major sectors and bourses trading in the green.
The recovery follows a sharp decline on Monday when the Stoxx 600 closed down 4.5%, marking its lowest level since January 2024. Key indices like the FTSE 100 (UK), DAX (Germany), and CAC 40 (France) also posted steep losses during the previous session.
The recent market turmoil has stemmed from renewed fears of a global trade war, as U.S. President Donald Trump continues to double down on his aggressive tariff policies. A fleeting market rally on Monday—triggered by rumors of a 90-day pause in U.S. tariffs—quickly reversed after the White House dismissed the speculation as false.
Later in the day, Trump intensified tensions by threatening an additional 50% tariff on Chinese goods if Beijing failed to withdraw its retaliatory 34% duties. In response, China’s Commerce Ministry stated it “resolutely opposes” Trump’s threats and pledged to take countermeasures to protect its national interests.
Despite the standoff, markets across Asia-Pacific closed higher on Tuesday, showing signs of recovery after Monday’s heavy losses. Meanwhile, U.S. stock futures also indicated a positive open, with futures tied to the S&P 500, Nasdaq 100, and Dow Jones Industrial Average all trending higher.
On the European front, European Commission President Ursula von der Leyen reiterated the EU’s willingness to negotiate and said the bloc had offered a “zero-for-zero” tariffs deal on industrial goods to Washington. However, Trump promptly rejected the offer.
The fragile optimism in Europe on Tuesday is being watched closely by investors for signs of lasting stability or further volatility amid the intensifying tariff war.
