European markets regained ground on Tuesday after days of weakness. Investors cautiously returned as geopolitical risks lingered. Most equity indexes opened slightly higher after Asian markets extended gains while U.S. futures dipped.
By midday, Milan’s stock exchange led Europe with a 0.80% rise. Banks such as UniCredit and Intesa Sanpaolo climbed steadily. Energy company Eni and aerospace group Leonardo also gained momentum.
Defence stocks lifted Germany’s trading session but failed to pull the DAX out of a 0.13% decline. Battleship and submarine manufacturer TKMS surged 6.28% in morning trading after its Frankfurt debut at around €60 per share. Rheinmetall AG added 0.48%, while BAE Systems in London slipped 0.91%.
Airbus, Thales, and Leonardo confirmed a satellite merger, leaving most shares steady except Leonardo, which rose 0.56%. The FTSE 100 advanced 0.22%, driven by stronger energy and bank shares. Utilities saw rising demand. The STOXX 600 index remained flat, and Paris’ CAC 40 climbed only 0.13% by midday.
Gold Pulls Back After Record Surge as Oil Prices Inch Up
Gold prices fell after setting a record above $4,390 an ounce. By 11:45 CEST, futures slid nearly 2%. The metal’s value has surged 60% this year amid rising geopolitical tension, persistent uncertainty, and a weakening U.S. dollar. HSBC predicted the rally could continue through 2026, pushing prices to $5,000 per ounce.
Crude oil edged higher in morning trade. U.S. benchmark crude traded at $57.62 a barrel, while Brent stood at $60.99. The euro slipped slightly to $1.1633 from $1.1641 as investors adjusted positions.
Russ Mould, investment director at AJ Bell, said optimism from Wall Street’s strong session spread across Asia and Europe. “Markets now focus on U.S. rate cuts, the corporate earnings season, and renewed U.S.-China trade talks,” he added.
Asia Gains on Japan’s Political Shift as Investors Watch U.S. Moves
Asian markets extended gains on Tuesday after Japan elected conservative lawmaker Sanae Takaichi as the country’s first female prime minister. Japan’s benchmark approached the symbolic 50,000 level, while Hong Kong’s Hang Seng rose 0.65% and Shanghai’s Composite Index gained 1.36%.
The U.S. dollar climbed to 151.31 yen from 150.75. Analysts said Takaichi’s push to slow Bank of Japan rate hikes could weaken the yen further and complicate inflation control.
U.S. futures dipped slightly following Monday’s strong rally. Investors await news that President Donald Trump may meet Chinese President Xi Jinping at a regional summit, fuelling hopes of reduced trade tensions.
Investors Eye Earnings, Inflation, and U.S. Economic Signals
Corporate earnings now drive market sentiment. Traders await results from Coca-Cola on Tuesday, Tesla on Wednesday, and Procter & Gamble on Friday. Analysts expect companies to prove profits can sustain the S&P 500’s 35% surge since April.
The U.S. government’s shutdown delayed key economic data, leaving corporate reports as vital indicators of growth. The Federal Reserve faces a challenge balancing inflation control with support for a slowing job market. Officials still signal more rate cuts, though excessive easing could stoke higher inflation.
The U.S. government plans to release September’s inflation report on Friday. The data, delayed earlier this month, will also determine cost-of-living adjustments for Social Security recipients. Regular updates remain suspended until the government fully resumes operations.
