European stocks rose after the US and EU reached a tariff agreement, reducing concerns about an escalating trade war. The Stoxx 600 gained 0.8%, with automakers and luxury stocks leading the rally.
The deal, finalized on Sunday, imposes a 15% tariff on most EU exports, though some sectors like pharmaceuticals and metals are exempt. While the dollar edged higher, bond yields in the US and Europe dipped.
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The agreement provides much-needed clarity for markets, removing the risk of further tariff hikes. Auto stocks were among the biggest winners – Stellantis jumped 3.1%, Porsche surged 3.5%, and Volkswagen rose 2.2%. Luxury brands like LVMH and Kering also gained.
However, some analysts cautioned that the rally might be short-lived until more details emerge. Higher tariffs could still weigh on EU growth and contribute to US inflation.
For now, the deal offers relief, particularly for trade-sensitive sectors, but long-term economic impacts remain uncertain.
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