Markets brush off Trump tariff moves as European stocks hit record highs

Investors remain unfazed by U.S. President Donald Trump’s latest tariff threats on pharmaceutical and semiconductor imports, seeing them as another negotiation tactic. Trump, who has long signaled his intent, plans to impose 25% or higher tariffs, with further hikes over the year. Auto tariffs may follow by April 2.

Meanwhile, European markets continue their strong run, with the STOXX 600 hitting a record high, up nearly 10% in 2025. Defence stocks are also rallying as military spending rises amid ongoing Russia-Ukraine peace talks.

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In the corporate world, Rio Tinto’s earnings report takes center stage, as investors assess how trade tensions might impact the mining giant. BHP has already warned of trade risks, reporting its lowest first-half profit in six years.

On the macro front, UK inflation data is expected to show a rise to 2.8% in January from 2.5% in December. With wage growth accelerating, the Bank of England remains cautious on rate cuts, keeping the pound strong—up 1.8% in February and set to break a three-month losing streak.