European stocks opened with mixed results on Tuesday as markets absorbed the first executive actions taken by newly inaugurated US President Donald Trump.
His return to the White House has already set the stage for potential market shifts, prompting traders to reassess both economic and political landscapes.
The UK’s FTSE index saw a modest increase, opening 10 points higher at 8,531, while Germany’s DAX edged up by 4 points to 21,004. France’s CAC 40 gained 7 points, reaching 7,740, and Italy’s FTSE MIB saw a stronger gain, rising 44 points to 36,326. However, the pan-European Stoxx 600 remained flat, and some indexes faced slight declines, reflecting the market’s uncertainty as investors digest the implications of Trump’s early executive orders.
Among notable corporate movements, Danish energy firm Orsted suffered a 15% drop in its share price after revealing a significant impairment related to its US offshore wind turbine projects. The company disclosed a $1.7 billion loss, highlighting the challenges the green energy sector faces in the wake of shifting US policies under Trump. Meanwhile, European automakers, including Stellantis and BMW, faced downward pressure due to the looming threat of new tariffs on the auto industry, particularly from the US.
Trump’s inauguration on January 20 marked the beginning of what is expected to be a transformative second term. In his first official actions, the President signed a series of executive orders that included plans to roll back some of the policies introduced by the previous administration. Notably, Trump signaled an aggressive stance on trade, including potential tariffs of up to 25% on imports from Mexico and Canada, which could impact both the automotive and agricultural sectors in Europe.
As global markets monitor the unfolding dynamics, European investors are keenly aware of Trump’s economic approach, which has traditionally favored a combination of deregulation and protectionist policies. His remarks about tariffs, particularly targeting trade deficits, have created uncertainty among international partners, while also inviting speculation that his measures could be a part of broader negotiation strategies.
Meanwhile, the World Economic Forum in Davos continues to provide a platform for world leaders to discuss global economic priorities. Although many key European leaders, including those from China and India, are absent this year, Trump is set to address the forum virtually, offering further insight into his administration’s trade policies and their potential effects on global markets.
In addition to Trump’s policies, investors in Europe are also focused on key economic data. The UK released its private sector wages data, which saw a 6% year-over-year rise for the three months to November. However, November payrolls showed a slight decline, indicating potential softening in the labor market. The Bank of England’s policy response to this mixed data could affect market sentiment in the coming months.
