European Stocks Set for Lower Open

European equity markets were poised for a lower open on Wednesday, giving back some of the previous session’s gains, as investors assessed proposed US plans to impose broad new tariffs. The US Trade Representative proposed tariffs of up to 12.5% on 60 trading partners, including the European Union, over alleged failures to ban goods made with forced labor. Investors also continued to track developments in the US–Iran conflict after tensions flared overnight, with Washington alleging that Tehran carried out fresh attacks despite a ceasefire still being in effect. On the data front, economic releases today include PMIs across the region, Russia’s unemployment and business confidence readings, EU PPI figures, and Austria’s GDP data. In premarket trading, Euro Stoxx 50 futures and Stoxx 600 futures were both down 0.3%.

European stocks closed firmly higher on Tuesday, trimming losses from last week with support from a respite in sovereign bonds despite the prolonged impasse between the US and Iran. The Euro STOXX 50 added 1.2% to 6,100 and the STOXX Europe 600 gained 0.7% to 625. The tech sector led the gains amid news that SK Hynix will double its wafer capacity and bullish signals from the largest companies. ASML surged 5% and Infineon gained 9.5%. Also, STMicroelectronics surged 15% after raising its earnings target and Prosus surged 9.4% after Tencent announced it was testing a new AI agent. Banks also closed sharply higher to track the rebound in sovereign bonds, with UniCredit, BNP Paribas, and Deutsche Bank adding more than 1.6%. Meanwhile, Eurozone's preliminary inflation data showed the headline rate rose to 3.2% as expected, while the core inflation rose slightly more than expected to 2.5%, consolidating bets of a rate hike by the ECB next week.

European stocks traded higher on Tuesday, with both the STOXX 50 and STOXX 600 gaining 0.6% after starting June with losses in the previous session. Investors took advantage of the recent pullback while assessing the sustainability of the global technology and AI-driven market rally. Market participants also remained focused on developments in the Middle East, where negotiations continue to fluctuate and the Strait of Hormuz remains largely closed. Still, a slight pullback in oil prices also helped to boost investors' mood. Meanwhile, Eurozone’s preliminary inflation data showed the headline rate rose to 3.2% as expected while the core inflation accelerate slightly more than expected to 2.5%. Tech shares remained among the top performers, including ASML Holding (1%), SAP (1.6%) and Infineon Technologies (5.3%). Prosus soared about 10% to top the STOXX 600 after a report showing Tencent, a company in which it holds a significant stake, is testing a new AI agent.