European stock markets are set for a lower open on Tuesday, with investors remaining on edge as the deadline for a potential 30% US tariff on European Union goods draws closer.
While corporate news, including a major investment in the UK’s new Sizewell C nuclear project, provided some individual stock focus, the overarching macroeconomic uncertainty is expected to weigh on the broader market.
A Cautious Start Amid Lingering Tariff Threats
Futures data from IG suggests a negative start to the new trading week for most European bourses: London’s FTSE 100 is seen opening 0.3% lower, France’s CAC 40 is also projected to fall by 0.3%, Germany’s DAX is expected to open down 0.4%, and Italy’s FTSE MIB is looking at a 0.4% lower start.
This cautious mood has persisted since US President Donald Trump announced earlier in July that he would impose a 30% tariff on goods imported from the EU, with the new duty scheduled to take effect on August 1.
While the EU has stated it hopes to strike a trade deal before then, an agreement remains elusive, and the bloc’s policymakers are reportedly considering retaliatory measures if a deal cannot be reached.
US Treasury Secretary Scott Bessent on Monday reinforced the administration’s hardline stance, stating that implementing high tariff rates on countries starting August 1 “will put more pressure on those countries to come with better agreements.”
Global market backdrop: Wall Street records, Asia mixed
The downbeat outlook for Europe comes after a session on Wall Street where the S&P 500 and Nasdaq Composite both hit fresh record highs, aided by a pre-earnings jump in shares of Alphabet.
The S&P 500 rose about 0.1% and the Nasdaq Composite advanced nearly 0.4%, with both indices hitting new all-time intraday highs and closing at records.
The Dow, however, underperformed and ended the day marginally lower. US stock futures were little changed in early European hours.
Asia-Pacific stocks traded mixed overnight, with Japanese stocks notably reopening higher as investors there assessed the fallout from a weekend election in which the ruling coalition lost its majority in the upper house.
British Gas invests £1.3B in Sizewell C
In a major piece of corporate news from the UK, utility firm Centrica, the owner of British Gas, has announced a phased investment of £1.3 billion ($1.75 billion) into the construction of the Sizewell C nuclear power plant.
This comes as the British government also on Tuesday gave its final approval for the project, which is set to be Britain’s biggest new nuclear power venture in decades. Centrica shares opened more than 4% higher on the news.
Final negotiations have established the ownership structure of the project: British Gas owner Centrica will hold a 15% stake, the British government will hold 44.9%, Canadian investment fund La Caisse will have 20%, France’s EDF will hold 12.5%, and Amber Infrastructure Group will have the remaining 7.6%.
Centrica said in a statement that the deal provides an allowed return on equity of 10.8%, and that it expects its equity share to increase to around £3 billion by the time of commercial operations in the 2030s.
The UK government stated on Tuesday that Sizewell C, along with new small modular nuclear reactors set to be built by engineering group Rolls-Royce and the delayed Hinkley Point C power plant, would collectively deliver “more new nuclear to the grid than over the previous half century combined.”
In a related development, US private credit giant Apollo announced last month that it would provide a £4.5 billion ($6 billion) loan to Hinkley Point C, a project that has previously faced controversy on national security grounds due to high levels of Chinese funding.
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