Market Overview

European markets are navigating a challenging environment marked by renewed trade tensions following the U.S. Supreme Court ruling that invalidated previous tariffs imposed by President Trump. In response, Trump has enacted a new 15% global tariff effective February 24, 2026, escalating uncertainty and impacting investor sentiment.

Major European indices such as the Euro Stoxx 50 (EU50) are down approximately 0.20%, Germany’s DAX has fallen about 0.44%, France’s FRE40 is down 0.25%, and the UK100 index is also down 0.25%. The broad Stoxx 600 index is declining around 0.30%, with industrial sectors particularly affected due to their sensitivity to foreign trade disruptions.

Key Market Drivers

• Trade Tensions: The new 15% tariff imposed by the U.S. has raised concerns about the stability of transatlantic trade relations. The European Parliament has suspended the ratification of the EU-US "Turnberry Agreement" in response, signaling a significant deterioration in trade cooperation.
• Safe-Haven Demand: Gold prices surged nearly 2% as investors sought refuge amid the uncertainty, with spot gold reaching a three-week high. Silver prices also rose, while oil prices remain near six-month highs due to geopolitical tensions, particularly involving U.S.-Iran relations.
• Currency Movements: The euro has shown modest resilience, rebounding slightly against the U.S. dollar, which weakened amid tariff uncertainties. The Japanese yen also strengthened, while the British pound saw limited gains.
• Sector Performance: Luxury goods companies like Kering and LVMH have provided some support to markets with gains of 3.3% and 1.5% respectively. Conversely, aerospace and defense sectors, including Airbus and Thales, are under pressure. Notably, Novo Nordisk shares dropped over 12% following clinical trial setbacks.

Technical and Instrument Insights

Euro Stoxx 50 (EU50)

The EU50 index is trading near daily resistance levels of 6274.3 (R3) and support at 6055.3 (S1). Technical indicators show a cautious outlook with mixed signals, reflecting the market's uncertainty amid trade tensions.

Euro (EUR/USD)

Resistance: 1.1828 / 1.1847

Support: 1.1747 / 1.1727

The euro is testing critical support levels after a 2.8% decline from its January highs. Technical analysis suggests a potential corrective phase if support fails, but maintaining above key levels could preserve a bullish outlook.

Other Instruments

• German DAX (DE30_EUR): Technical bias is generally bullish in the medium term, but short-term signals are mixed with some bearish momentum indicators.
• Silver (XAG_EUR): Showing strong technical signals with most moving averages indicating a long position, though some momentum indicators are neutral or short-term bearish.
• Energy Sector: Oil prices remain elevated near $71 per barrel, influenced by geopolitical risks and upcoming U.S.-Iran nuclear talks.

Macroeconomic and Political Context

The European Central Bank (ECB) President Christine Lagarde has cautioned that unpredictable trade policies could disrupt investment and economic stability in the region. Germany’s Ifo business climate index rose to 88.6 points in February, indicating tentative signs of recovery. Euro area manufacturing PMI data also showed expansion after months of contraction.

Meanwhile, the U.S. House of Representatives has expressed opposition to the tariffs, particularly concerning Canada, but President Trump remains firm on his tariff strategy, posing ongoing risks to European exporters.

Outlook and Investor Guidance

Investors should remain cautious amid the evolving trade landscape and geopolitical tensions. Key upcoming events include corporate earnings releases in Europe and the U.S., as well as economic data such as U.S. consumer confidence and manufacturing indices. Monitoring technical support and resistance levels in major European indices and currencies will be crucial for navigating potential volatility.

Safe-haven assets like gold may continue to attract demand if trade tensions persist, while sectors sensitive to global trade flows could face further pressure.