European shares rose on Tuesday as investors digested fast-changing US tariff plans, while shares of LVMH slumped after disappointing first-quarter revenue from the world’s largest luxury group underscored the damage caused by the trade war.
The pan-European STOXX 600 climbed nearly 1%, as of 0802 GMT, with most regional indexes in positive territory —except for France’s CAC 40, which dipped 0.1%. The decline was dragged down by a 7.7% drop in LVMH, set for its steepest fall since March 2020, if losses hold.
The bellwether for the luxury sector said shoppers in the United States cut spending on beauty products and drinks, while sales in China stayed weak during the quarter.
Peers including Cartier owner Richemont, Gucci parent Kering and Moncler fell between 1.4% and 2.6%. French cosmetics giant L’Oreal and Spanish beauty company Puig fell 2.5% and 2.7%, respectively.
But stock indexes in Germany, Spain, and the UK rose between 0.6% and 0.7%.
The auto and parts index climbed 2.2%, leading gains among sectors, after US President Donald Trump said he was considering a modification to the 25% tariffs imposed on foreign auto and auto parts imports from Mexico, Canada and other countries.
“There is a positive tone because the market is digesting a temporary carve-out in auto tariffs that is being talked about and is also still reacting to the relief that the electronics sector received, even if it’s temporary,” said Georgios Leontaris, chief investment officer for Switzerland and EMEA, HSBC Global Private Banking and Wealth.
“It certainly de-escalates, at least for now, coupled with a 90-day pause in some of the reciprocal tariffs.”
Weeks of back-and-forth over tariffs have rattled global markets, dragging the benchmark index down 11.2% from its record-closing high as of the last session.
European shares climb as Trump eases China tariffs on key electronics
Trump first announced reciprocal tariffs around the world in early April before suddenly dialling back those duties last week for a 90-day period, whip-sawing financial markets.
However, even with the 90-day reprieve, the European Union is still being hit by a broad 10% tariff, not to mention higher rates on steel, aluminium and cars.
BE Semiconductor Industries (BESI) jumped 6.8% after US-based computer chip equipment supplier Applied Materials bought a 9% stake in the Dutch semiconductor advanced packaging firm.
Ericsson rose 6.9% after the telecoms equipment maker reported much better-than-expected first-quarter core earnings.
Shares in Fugro fell 14.6% after the Dutch geological data specialist cut its first-quarter revenue and profit outlook.
Investors now await the European Central Bank’s policy meeting on Thursday, with markets widely anticipating a 25-basis-point rate cut.
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