European markets opened lower on Tuesday, caught in the fallout from renewed tensions between China and the United States.
Beijing’s latest countermeasures against American-linked shipping companies reignited fears of a broader trade rift, unsettling investors already cautious ahead of a heavy week for corporate earnings.
By mid-morning in London, major regional indices were in the red, with the Stoxx Europe 600 sliding close to 1%. Sectors tied to global trade and industrial demand, such as autos and mining, were hit hardest. Traders said the mood across Europe turned defensive as fresh sanctions signaled that Washington and Beijing’s long-running maritime dispute could escalate.
Amid the broader downturn, Ericsson AB provided a rare dose of optimism. The Swedish telecom giant surged more than 10% after posting results that exceeded expectations, buoyed by a one-off gain from the sale of its subsidiary Iconectiv. The upbeat report offered some relief to the telecom sector, which outperformed while most others fell.
In contrast, Michelin’s warning about declining North American demand erased nearly 9% from its share price. The tiremaker’s disappointing outlook highlighted growing concern over consumer weakness outside Europe, compounding the day’s bearish sentiment.
Traders said markets are once again struggling with a blend of geopolitical uncertainty and uneven corporate performance. “Investors are clearly uneasy,” said Guillermo Hernandez Sampere of MPPM. “The ongoing tariff dispute has become a recurring source of anxiety, and until that stabilizes, risk appetite will remain limited.”
Attention is also turning to the upcoming earnings season, with Wall Street heavyweights such as JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo all set to release results later in the day. Their numbers are expected to set the tone for global markets through the rest of the week.
Meanwhile, analysts are keeping an eye on the European luxury and banking sectors. The former is expected to show stronger growth early next year, though many firms are already trading at stretched valuations. In the financial space, UK retailers face pressure from slowing September sales, while Italian lenders could come under scrutiny after reports that the government may impose a new levy to raise roughly €2.8 billion for its upcoming budget.
As markets brace for more data and political headlines, volatility appears likely to persist – especially with both Washington and Beijing showing no signs of backing down.
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