Trump Blinks on Tariffs—EU Markets Sigh in Relief as Equities Rally

Markets exhale as geopolitical tension eases—for now.

Stocks spike after US trade war rhetoric softens—proving once again that Wall Street thrives on uncertainty until it doesn’t.

Another day, another temporary reprieve from self-inflicted economic wounds.

In brief

• Trump postpones European surtaxes, easing immediate fears in financial markets.
• The CAC 40 gains 1.01%, a sign of renewed optimism among investors.
• The auto, luxury, and semiconductor sectors benefit from the rebound in the European stock market.

A spectacular surge in European stock markets after an unexpected call

On Sunday, May 25, Ursula von der Leyen picked up her phone and placed a decisive call. On the line,. The American president, after a week of escalation,. Europe obtains until July 9 to continue trade talks.

The EU and the US have the world’s most integrated economic relationship.

. The next day,. The CAC 40 rises by 1.01%, the DAX by 1.44%. The EuroStoxx 50 climbs 1.29%. Even peripheral indices follow. However, London remained closed that day, reducing trading.

In comparison,: +0.85% for the Dow Jones. The Nasdaq 100 gains 1.19%. In Asia, the trend is mixed. The Nikkei and Kospi rise, while the Hang Seng falls.

European investors regain appetite. The call between Trump and von der Leyen thus froze a trade war. For how long?

Tariff threats that shook the stock market… and Bitcoin

The previous week had been much more turbulent. On, Trump announced, quickly lowered to 10% for 90 days. Then, he came back at it. On Truth Social, he wrote: “The talks are going nowhere!“

Onstarting June 1. Immediate consequence: European stock markets plunged. The CAC 40 lost 2.8%, the DAX fell 2.3%, the Stoxx 600 dropped 1.9%. Banks suffered: Deutsche Bank -5.2%, Société Générale -4.6%. Even luxury and automotive stocks fell. Bitcoin itself wobbled and fell 3.7% in one session.

Nervousness spreads to the bond market: yields on German bunds fall by 10 basis points.. The Swiss franc gains 0.6% against the dollar. Amid this chaos, the European stock market absorbs the shock, then waits. Sunday’s call changes the game. But the fracture is revealed.

The truce does not erase the sword of Damocles

The tariff threat is simply deferred. Ursula von der Leyen pleaded for more time. She obtained five weeks. But Trump remains unpredictable. In fact, he writes:

I agreed to the extension — July 9, 2025 — It was my privilege to do so.

The market knows that. Proof: volatility remains high. Bonds are still in high demand. Caution prevails.

Funds FLOW out of American assets. European equity ETFs have attracted 34 billion euros since January. Conversely, those targeting the United States have received only 8.2 billion. This reversal reflects a profound change in perception.

But nothing is yet certain.. The euro remains strong, but the dollar falters. Moody’s downgraded the US credit rating, adding to uncertainty. The stock market moves forward on a fragile line.

Some key figures to remember:

• The CAC 40 fell 2.8% on May 23, then rebounded 1.01% on May 27;
• Deutsche Bank lost 5.2% in one session before a partial rebound on Monday;
• The Swiss franc gained 0.6% against the dollar, strengthening its role as a safe haven;
• 34 billion euros invested in European equity ETFs since January;
• The bitcoin price fell 3.7% when Trump’s surtaxes were announced.

Donald Trump granted a reprieve to the European Union until July 9, offering a respite to the markets. However, uncertainty persists, fueled by political and economic volatility. This delay allowed thealso supported by the eagerly awaited Fed decision to maintain rates on May 8. This combination of factors revived investor confidence despite the risks still present. Europe gains time to negotiate, but vigilance remains essential in a tense international context.

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