Finance
European shares gain on defence boost, tariff delay aids sentiment
Published by Global Banking & Finance Review®
Posted on May 27, 2025
3 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 27, 2025
3 min readLast updated: January 23, 2026
European shares rise with defense stocks leading gains. U.S. tariff delay on EU boosts sentiment, while Germany's DAX 40 hits a record high.
By Nikhil Sharma, Purvi Agarwal and Ragini Mathur
(Reuters) -European shares closed higher on Tuesday with defence stocks boosting the market after U.S. President Donald Trump threatened additional sanctions on Russia, while optimism lingered from the delay of U.S. tariffs on the European Union.
The STOXX 600 index closed 0.3% higher, building on Monday's 1% rise after Trump gave the EU a reprieve on his threatened 50% tariffs.
EU policymakers have asked the bloc's leading companies and CEOs for U.S. investment plans to prepare for trade talks with Washington, according to two sources.
The bloc set up trade meetings with the United States, a step Trump said was positive.
The latest flip-flop on EU tariffs highlights the unpredictability of Trump's trade policies, that have been shaking investor confidence and raising concerns over the fiscal health of the U.S. economy.
The uncertainty has been pushing investors away from U.S. assets to find other safe havens internationally.
Europe's defence index jumped 1.7% to a record high, after Trump said he would recommend additional sanctions on Moscow, amid escalating tensions between Russia and Ukraine.
"There is recognition of the fact that Trump is less close to Putin than he had been and that there is more likely to be a prolonged conflict in Ukraine rather than the quick end" said Nick Saunders, CEO of Webull UK.
"Defence is definitely a sector that is in fashion at the moment."
Technology shares rose 1.1%, while industrials added 0.9%.
"People are actually looking for value at the moment and trying to pick the most profitable stocks rather than assuming that the rising tide is going to float all boats," said Saunders.
In Germany, the DAX 40 ended 0.8% higher, closing at an all-time high, after a survey indicated consumer sentiment is set to improve slightly heading into June.
However, the German Chamber of Commerce and Industry (DIHK) forecast a contraction in the economy this year.
Euro zone government bond yields dipped on the day.
Britain's FTSE 100 share index ended 0.7% higher as investors returned following a holiday on Monday.
French benchmark index CAC 40 was flat after preliminary data showed inflation fell to its lowest level since December 2020 in May, with the government hinting at proposals to get public finances under control in early July.
FLSmidth rose 3.4% after Goldman Sachs raised the mining and cement technology supplier's rating to "buy" from "neutral" on expectations of higher margins.
(Reporting by Nikhil Sharma, Purvi Agarwal and Ragini Mathur; Editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Emelia Sithole-Matarise)
European shares closed higher due to a boost from defense stocks after U.S. President Trump threatened additional sanctions on Russia and a delay in tariffs that improved market sentiment.
The DAX 40 ended 0.8% higher, reaching an all-time high, following a survey that indicated a slight improvement in consumer sentiment.
Investors showed optimism as Trump provided a reprieve on his threatened tariffs, which helped to stabilize market confidence amid ongoing trade talks with the U.S.
The defense sector saw significant gains, jumping 1.7%, while technology shares rose by 1.1% and industrials added 0.9%.
The German Chamber of Commerce and Industry (DIHK) forecasted a contraction in the economy for the year, despite the positive consumer sentiment indicated by recent surveys.
Explore more articles in the Finance category
