Investing.com - European stock markets closed mixed Tuesday after tariffs concerns ease, although but inflation concerns and rising borrowing costs keep investors cautious.
At 12:00 ET (1700 GMT), the DAX index in Germany climbed 0.6%, the CAC 40 in France gained 0.2%, while the FTSE 100 in the UK underperformed, falling 0.3%.
Tariffs report helps tone
European equities have bounced from the prior session’s weakness, helped by reports of a gradual US tariff increase under the new Donald Trump administration.
A Bloomberg report indicated that members of President-elect Donald Trump’s incoming economic team are considering a plan to gradually increase tariffs each month.
The proposal is in the preliminary stages and has not yet been presented to Trump, indicating that the concept is still under early consideration.
Trump has vowed to impose a minimum 60% tariff on Chinese exports, and has also signaled that European auto manufacturers could face additional costs importing into the US.
French PM set to speak
That said, investors will continue to keep an eye on government bond yields in the eurozone, the UK and the US, after yields on short and long-dated government debt climbed to fresh multi-month highs last week, raising the costs of governments servicing their debt.
New French Prime Minister Francois Bayrou is scheduled to speak later in the session, appealing for support from some opposition parties - and the Socialists in particular - in order to pass the 2025 budget.
French government debt yields have soared this year as investors worry about political instability and a burgeoning public deficit, and investors are worried Bayrou will row back on pension reforms that could save billions of euros for the government.
Also of note will be the release of US producer prices, ahead of the more widely-watched consumer price index on Wednesday, as investors fret that elevated inflation levels will limit interest rate cuts by the Federal Reserve in 2025.
The European Central Bank, by contrast, is widely expected to cut interest rates at least four times this year, having cut four times last year.
BP (NYSE:BP) warns over lower margins
In corporate news, BP (LON:BP) stock fell over 2% after the energy giant said that lower refining margins would hurt its fourth-quarter profit by $100 million to $300 million.
Ocado (LON:OCDO) stock soared 9.5% after the British online supermarket said its sales growth accelerated in its fourth quarter, as more competitive pricing helped it win more customers from rivals.
JD Sports Fashion (LON:JD) stock dropped 6% after the retailer cut its full year profit guidance after revenue fell during the all-important Christmas quarter.
Persimmon (LON:PSN) stock gained 5.5% after the housebuilder reported growth in sales last year, pointing to the beginnings of recovery in the housing market.
Temenos (SIX:TEMN) surged 5% to its highest level since April 2024 after the Swiss banking software firm reported better-than-expected fourth-quarter results.
Lindt & Spruengli (SIX:LISN) stock rose 3.7% after the Swiss chocolate maker said its sales grew 7.8% organically last year.
Crude retreats from four-month highs
Oil prices slipped lower Tuesday, retreating from the four-month highs that were triggered by new US sanctions on Russian oil exports and worries over supply disruptions.
By 12:00 ET, the US crude futures (WTI) dropped 0.9% to $76.61 a barrel, while the Brent contract fell 0.9% to $80.28 a barrel.
Oil has gained strongly over the prior two sessions after the Biden administration introduced its most comprehensive sanctions package to date, aimed at cutting into Russia's oil and gas revenues.
These developments are expected to significantly disrupt Russian oil exports, compelling major importers like China and India to seek alternative suppliers in regions such as the Middle East, Africa, and the Americas.