Markets Today: European stocks rise as Wall Street data and tariff developments weigh on sentiment
European equities edged higher as traders absorbed the latest signals from U.S. tariff policy and watched for the annual data that could clarify which sectors are most exposed. Italy’s Industry Minister Adolfo Urso underscored a cautious, data-driven approach, saying we must wait for annual figures to truly identify affected sectors and craft targeted responses. Across Europe, the Stoxx 600 rose about 0.7%, with London, Paris, Frankfurt, Milan and Madrid posting gains as investors tempered expectations about the global impact of tariffs while keeping an eye on domestic drivers.
Urso emphasizes data before policy tweaks
Urso noted that the tariff moves from the United States require a careful, data-backed response. He argued that only annual data can clearly show which industries are hit and how to implement effective, focused measures. On the broader horizon, he said Europe is pursuing economic openness by urging the Commission to advance work with Mercosur and Indonesia and to push new agreements with India or Gulf economies, aiming to diversify and protect European exports.
U.S. data and the shutdown cast a mixed light on markets
In the U.S., Wall Street opened lower as the federal government entered a shutdown, reflecting the budget standoff between Republicans and Democrats. The Dow dipped about 0.2%, the Nasdaq fell around 0.6%, and the S&P 500 declined roughly 0.5%. The shutdown threatens to pause key data releases, including the eagerly anticipated jobs report, while payroll data from ADP added to the caution, signaling cooling in the private sector job market.
ADP private payrolls and sector signals
ADP reported a surprise private-sector job loss of 32,000 in September, reversing expectations of growth and following an upward revision of 3,000 jobs in August. The data underlines a softer labor market, reinforcing investor focus on upcoming official numbers and the broader trajectory of the U.S. economy as policymakers weigh the path for monetary policy.
<h2 Fixed-income and commodities in flux
Bond markets reflected a tug-of-war between cooling growth signals and the uncertainty surrounding fiscal policy. The U.S. 10-year yield edged lower, sliding to about 4.09%, while European yields also moved, with Italy’s 10-year yield around 3.50% and Germany’s near 2.69%. The Italian-SPD spread narrowed to around 81 basis points, helping to support European risk appetite. In currencies, the euro traded near $1.176 per dollar, helped by softer dollar vibes amid the shutdown uncertainty.
Household financing costs rise as mortgage rates tick up
The mortgage landscape in the United States showed a modest tightening, with the 30-year fixed-rate mortgage averaging 6.46%, up from 6.34% the prior week. The rise followed firmer Treasury yields and suggests a temporary cap on refinancing activity as borrowers reassess costs in a higher rate environment.
<h2 Energy, inflation and corporate backdrop
Commodity markets were mixed: oil prices softened, with WTI around $61.6 per barrel and Brent near $65.3, while sentiment on inflation in the euro area remained a focal point for the European Central Bank’s policy stance. Inflation in the euro area stood at 2.2% year over year in September, up from 2.0% in August, a persistence of price pressures that could influence the timing of monetary accommodation.
Healthcare and tariffs weigh on equities
Stocks in the healthcare sector led gains in Europe on news of Pfizer-related tariff concessions, underscoring how tariff policy can ripple through specialized industries. In Milan, healthcare names posted notable moves, with some Italian mid-caps and large pharmas contributing to the day’s gains. Nike warned that U.S. tariffs could cost approximately $1.5 billion this fiscal year, a reminder that tariff dynamics remain a meaningful risk for consumer brands with extensive overseas sourcing.
<h2 Market snapshot: a cautious but resilient tone
Across Europe, the day’s leadership was broad but selective: the Stoxx 50 rose, while London, Paris and Frankfurt posted solid gains. In Milan, traders kept an eye on the Pepp and other domestic indicators as the inflation backdrop and potential ECB easing assumptions shaped the session. Investors continued to monitor the potential delay in U.S. job data due to the shutdown, weighing this against improving European inflation signals and the prospect of more accommodative financial conditions in the eurozone.
<h2 What to watch next
Markets will be watching for more clarity on U.S. fiscal policy and the timing of key data releases. The corporate backdrop — including any further tariff news and sector-specific impacts — will influence whether Europe can sustain its current momentum. With inflation data in the euro area and ongoing geopolitical developments, investors should expect continued volatility but also opportunities in defensive sectors and healthcare-related equities.
