European equity indices gained Monday, starting the new week on a positive note after the White House signaled that electronics will be exempt from the new “reciprocal” tariffs, raising hopes that U.S. President Donald Trump will rein in other duties.
At 03:05 ET (07:05 GMT), the DAX index in Germany climbed 2.1%, the CAC 40 in France gained 2% and the FTSE 100 in the U.K. rose 1.5%.
The pan-Europe Stoxx 600 index gained 1.4%.
Trump has exempted smartphones, computers and other electronic devices and components from his reciprocal tariffs, new guidance, issued late Friday, from U.S. Customs and Border Protection showed.
This followed the U.S. president imposing 145% tariffs on products from China earlier this month, a move that threatened to take a toll on tech giants like Apple (NASDAQ:AAPL), given the importance of China in the supply chain.
European stock markets have benefited from the move, with investors speculating that the turmoil in the global markets that has followed the imposition of Trump’s tariffs may result in a less impactful trade war.
That said, there still remains a great deal of uncertainty, with Trump saying over the weekend that this was temporary, and that he was planning next week to announce separate tariffs on electronics, which could include semiconductors.
He also noted that electronics imports from China were still subject to a 20% tariff imposed in March.
There is little economic data to digest in Europe Monday, and all eyes will be on this week’s meeting of the European Central Bank later this week, with policymakers having to account for renewed economic pressures from trade tensions and a stronger euro.
The ECB’s stance has likely shifted since its March meeting, according to analysts at ING, as new U.S. tariffs on European goods, coupled with a rising euro and falling energy prices, have raised concerns over growth and disinflation in the near term.
At the last meeting, rates were considered close to neutral, and optimism had grown following Germany’s fiscal policy reversal and increased European defense spending.
In the corporate sector, European tech stocks, including ASML (AS:ASML) and SAP (ETR:SAPG), have posted strong gains after the U.S. granted exclusions from tariffs on electronics imported largely from China.
Elsewhere, Swiss building materials company Holcim (SIX:HOLN) announced that the planned spin-off of its North American business should take place in June, subject to the approval of shareholders at its May 14 annual general meeting.
Oil prices steadied Monday after recent losses on concerns the escalating trade war between the United States and China, the two largest economies in the world, would weaken global economic growth and crimp fuel demand.
At 03:05 ET, Brent futures dropped 0.1% to $64.67 a barrel. U.S. West Texas Intermediate crude futures fell 0.1% to $61.44 a barrel.
Both contracts have lost about $10 a barrel since the start of the month as a trade war between the world’s two largest economies has intensified.
