European stock markets began Thursday on a positive note, with the regional Stoxx 600 index climbing higher as investors digested a deluge of corporate earnings reports from some of the continent’s largest companies.
This upbeat start, supported by a strong showing from US tech giants, comes amidst a complex global backdrop of shifting trade policies and central bank decisions.
On what is one of the busiest days of the year for corporate results, several heavyweight regional companies have already reported, with many providing a positive surprise.
The pan-European Stoxx 600 Index was 0.4% higher by 8:18 a.m. in London. Technology stocks were among the biggest gainers, finding a tailwind from positive after-hours earnings reports on Wednesday from US megacaps Microsoft Corp. and Meta Platforms Inc.
French bank Societe Generale SA was a standout performer, gaining 6.5% after it boosted its planned investor payouts and improved its profitability guidance.
This was part of a broader, encouraging trend. “As far as I can tell from the flurry of publications, the overall picture is rather positive, with a good chunk of beats,” Karen Georges, a fund manager at Ecofi, told Bloomberg.
It’s really the good results in the US which are providing a tailwind for markets.
However, not all earnings news was positive. Anheuser-Busch InBev dropped a staggering 11% after the world’s biggest brewer reported that it had sold less beer than expected during the second quarter.
ArcelorMittal SA, the world’s number two steelmaker, dropped 3.5% after it cut its forecast for steel demand outside of China. In a bright spot for the UK market, Rolls-Royce Holdings Plc rose 11% after it raised its outlook for the year, as the aircraft engine maker benefited from its savings program and strong demand across the aerospace industry.
A flood of other major earnings reports are also due today from companies including Unilever, Shell, London Stock Exchange Group, BMW, Renault, Sanofi, and LVMH.
Trade policy twists and Central Bank watch
The markets are also contending with the latest developments in US trade policy.
In a surprising move, copper prices were little changed on the London Metal Exchange on Thursday—following a collapse in New York—after US President Donald Trump shocked the metals world by exempting the most widely traded forms of copper from his hotly anticipated import tariffs.
This was a significant reversal from his earlier announcement of a 50% tariff on some copper imports, which had sent mining stocks lower.
In other trade news, President Trump said he had reached a deal with South Korea that would impose a 15% tariff on its exports to the US and see Seoul agree to $350 billion in US investments. South Korean stocks, however, dipped as investors appeared to shrug off the deal.
Central banks also remain a key focus. The US dollar dropped, sliding from its highest level since May, after Federal Reserve Chair Jerome Powell on Wednesday said that no decision had been made about easing monetary policy in September. US Treasuries rose across the curve after slumping in the prior session.
The Japanese yen held its gain after the Bank of Japan kept its benchmark rate unchanged while boosting its inflation outlook, a decision that was correctly forecasted by all 56 surveyed economists.
On the data front in Europe today, French, German, and Italian inflation data is due, as are the latest German and EU unemployment figures. The main regional Stoxx 600 index is currently set for a gain of about 1.9% in July, which would extend its year-to-date gains to 9%.
However, the benchmark is likely to face historical headwinds, as it has traditionally had its worst performance in the months of August and September.
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