Stock markets showed mixed performances on Tuesday as investors held their breath ahead of a key US Federal Reserve interest rate meeting, seeking clues about the economic outlook amid ongoing tariff challenges.
In Europe, stocks were largely under pressure. Frankfurt’s DAX index dropped around 1% after German conservative leader Friedrich Merz faced an unexpected setback, failing to secure a majority in the first parliamentary vote for chancellor. Meanwhile, Paris saw declines, and London remained largely unchanged in early afternoon trading.
The US Federal Reserve is widely expected to keep interest rates steady at its meeting on Wednesday, even as President Donald Trump advocates for further rate cuts. Despite the contraction of the US economy in the first quarter, recent strong employment and services sector data suggest resilience, leaving investors keen to see the Fed’s next steps.
On Thursday, the Bank of England is anticipated to reduce its key interest rate by a quarter-point to 4.25%, as concerns mount over weak growth in the UK economy.
In Asia, markets were more optimistic, with some positive sentiment emerging from ongoing efforts to ease the impact of Trump’s tariffs, which have caused significant disruptions to global markets. US Treasury Secretary Scott Bessent revealed that 17 countries had approached the Trump administration with promising trade proposals, and that “substantial progress” could be made with China in the coming weeks. China has faced a hefty 145% tariff on some of its exports.
Hong Kong and Shanghai stock markets ended the day higher as investors returned from the long weekend. This positivity came despite losses on Wall Street, where the S&P 500 snapped a nine-day winning streak and movie studios were rattled by Trump’s warning of additional tariffs on foreign films.
Oil prices saw a notable rebound, rising more than 2% as they clawed back losses from Monday. This followed news that Saudi Arabia, Russia, and six other OPEC+ members had agreed to boost oil output by 411,000 barrels per day in June, a move that caused price drops when it was first announced last month.
In corporate news, US food delivery service DoorDash reached a deal to acquire UK-based Deliveroo for £2.9 billion ($3.9 billion), a price tag that is less than half of its initial public offering valuation. Deliveroo’s shares rose by around 2% on the London stock exchange.
Meanwhile, Danish wind turbine manufacturer Vestas saw its shares climb by 5% in Copenhagen after it reaffirmed its annual earnings forecasts despite ongoing geopolitical and tariff uncertainties.
Key Figures at 1100 GMT:
- London – FTSE 100: Flat at 8,593.68 points
- Paris – CAC 40: Down 0.4% at 7,695.11
- Frankfurt – DAX: Down 0.9% at 23,139.69
- Hong Kong – Hang Seng Index: Up 0.7% at 22,662.71 (close)
- Shanghai – Composite: Up 1.1% at 3,316.11 (close)
- Tokyo – Nikkei 225: Closed for a holiday
- New York – Dow: Up 0.2% at 41,218.83 (close)
Currency & Commodities:
- Euro/Dollar: Up at $1.1326 from $1.1319
- Pound/Dollar: Up at $1.3350 from $1.3296
- Dollar/Yen: Down at 143.11 yen from 143.72
- Euro/Pound: Down at 84.84 pence from 85.10
- Brent Crude: Up 2.1% at $61.48 per barrel
- West Texas Intermediate: Up 2.1% at $58.34 per barrel
