EUROPEAN EQUITIES UPDATE: Stocks mostly lower in reaction to Trump's steel tariffs and US-China updates

STOXX 600: -0.1%

• European bourses opened entirely in the red following a mostly subdued APAC session; selling pressure briefly exacerbated in early morning trade, but this proved fleeting. Thereafter, the risk tone has improved a touch, alongside the release of the EZ PMIs - they were mixed, but with the underlying narrative shown by the metrics as constructive.


• Sentiment today has been pressured for a couple of reasons; 1) US President Trump said he will double US steel and aluminium tariffs from 25% to 50%, effective June 4th, 2) US Treasury Secretary Bessent said China is holding back products essential to the industrial supply chain and he believes President Trump will talk to Chinese President Xi very soon, according to a CBS interview.

Sectors: Negative

• European sectors opened with a negative bias and have remained subdued throughout the morning.


• Energy tops the index given the recent surge in oil prices as the complex reacts to the latest OPEC+ decision over the weekend (see Commodities for details).


• Consumer Products and Services sits at the foot of the pile, with Luxury doing much of the dragging. The subdued sentiment alongside weaker-than-expected Chinese NBS Services figures has pressured the sector.

Others: FTSE 100 +0.1%, DAX 40 -0.3%

• The FTSE 100 is a little firmer and faring better vs peers, likely due to its heavy weighting to energy/mining names, which have been propped up by broader strength in underlying metals prices. Fresnillo (+2.4%) tops the pile given the upside in gold prices today; energy giants such as BP (+0.6%) and Shell (+0.5%) also gain. Other key stories include; HSBC (-0.2%) is reportedly exiting the US business banking unit to simplify operations and focus on Asia and the Middle East.


• The DAX 40 is posting losses about in-fitting with peers – autos populate the bottom of the index, following the aforementioned Trump tariffs on steel and aluminium. Elsewhere, BASF (-1%) has launched the sale of its coatings business, with a potential valuation of about EUR 6bln, Bloomberg reports. Separately, Deutsche Bank pledges fresh cost savings measures after its retail unit missed targets, according to the FT.

US Equity Futures: ES -0.4%, NQ -0.5%, RTY -0.4%

• Futures are lower across the board, with sentiment in the complex hit following Trump’s decision to double steel import tariffs to 50% and after hawkish rhetoric from the US side on China.


• Final manufacturing PMI data are due from S&P Global, as well as the US ISM manufacturing report for May. Today's speakers' slate features Fed Chair Powell (who will be giving opening remarks), Fed's Logan (2026 voter), Fed's Goolsbee (2025 voter).

02 Jun 2025 - 10:15- ForexEU Research- Source: Newswires