European markets respond to Trump tariffs and Urso remarks
European equities edged higher as traders reassessed the impact of U.S. tariff moves and awaited fresh data from the United States. The pan-European Stoxx 600 rose about 0.7%, with notable strength in healthcare and utilities, while London, Paris, and Frankfurt posted gains of roughly 0.6–0.7%. Milan lagged slightly but remained in positive territory. The currency market saw the euro firm around 1.176 per dollar, lifting risk-on sentiment across continental markets.
A broad-based rally with sectoral leadership
Sector performance showed a tilt toward defensives and healthcare, which climbed as much as 3–4% in parts of the continent. Healthcare led the gains, supported by news in the sector that cushioned some of the tariff-related concerns. Utility shares also advanced, while energy posted modest gains as the price of gas softened. Banks and insurers also contributed to the positive session, underscoring a cautious but constructive mood as investors gauged the spillover effects of U.S. trade policy on European exporters.
Bond markets reflected a touch of relief, with yields inching lower across core government bonds. The Italian 10-year yield hovered around 3.5%, while the German Bund traded near 2.69%, helping to narrow some of the spread worries that had surfaced in the prior sessions. In currency markets, the dollar remained softer against the euro, a dynamic that added to the European equity strength.
Commodities in flux as markets digest the macro backdrop
Oil prices traded with a bid-ask feel for direction: WTI hovered near $61.6 a barrel and Brent around $65.3, reflecting a landscape where supply considerations mingle with growth expectations. Gold, often a barometer of risk sentiment, fluctuated in the high $3,800s per ounce as investors weighed safe-haven demand against a tentative appetite for risk.
U.S. data watchers and a looming shutdown shadow
In the United States, equity indices opened lower as the federal government began its first shutdown in nearly seven years, casting a pall over the appetite for risk assets. The Dow Jones slipped about 0.2%, the Nasdaq fell roughly 0.6%, and the S&P 500 declined around 0.4%. The shutdown threatened routine data releases and government services, complicating the near-term economic outlook.
Meanwhile, private payroll data from ADP underscored a cooling labor market: the private sector shed about 32,000 jobs in September, defying expectations of a gain and signaling that the U.S. job market might be cooling faster than anticipated. Amid this backdrop, several large financials traded lower on concerns about macro demand and the possibility of a more cautious consumer environment.
Tariffs in focus: Urso’s caution and EU trade strategy
On the European policy front, Italy’s Minister of Enterprise Adolfo Urso stressed that the impact of U.S. tariffs on Italian exports requires careful, data-driven analysis. “We must wait for annual data to truly understand which sectors are affected by tariffs and how to design targeted, effective measures,” Urso said during a session with lawmakers. His remarks come as Europe presses ahead with a broader trade strategy. He noted that the European Commission has been urged to advance deals with Mercosur and Indonesia and to finalize agreements with India, the United Arab Emirates, and other Gulf and Southeast Asian partners, positioning Europe to respond more nimbly to tariff shocks.
The tariff dialogue also touched corporate bottom lines. Nike has warned that U.S. tariffs could cost about $1.5 billion in the current fiscal year, a material drag on margins if costs are not offset by pricing strategies or supply chain adjustments. In a further signal of the tariff’s reach, Pfizer’s recent agreement with the United States—reducing Medicaid drug prices in exchange for tariff relief—has provided some relief to healthcare costs and could influence broader sector sentiment in Europe as well.
What to watch: the data calendar and policy signals
Investors remain cautious but engaged as the calendar points toward more U.S. data releases—especially the weekly and monthly payroll metrics—that could clarify the trajectory of the labor market and consumer demand. Traders will also be watching for any developments on the U.S. government’s budget negotiations and the potential timing of any tariff relief or new trade concessions. In Europe, attention centers on inflation prints and central bank signals. The euro area inflation rate for September, reported at around 2.2%, adds to expectations that the European Central Bank could maintain a cautious stance while monitoring disinflationary momentum and growth prospects.
Milano and Europe: a positive, but tempered, tone
Italy’s stock market mirrored the broader European mood with a cautious tilt higher. Notable gains came from healthcare and some consumer-related names, while sentiment remained sensitive to the U.S. political calendar and tariff developments. Across Europe, the broader market breadth was improving, with Euro Stoxx 50 edging higher and a relief rally seeing banks, insurers, and energy stocks contributing to the gains. The combination of a softer dollar, a tentatively easing energy backdrop, and selective sector leadership painted a picture of a market that remains receptive to data-driven optimism amid a cloud of tariff and policy uncertainty.
Bottom line
As traders weigh the implications of Trump’s tariffs against the backdrop of U.S. shutdown and cooling payroll data, European markets appeared to stabilize with selective upside. The coming weeks will be crucial for assessing how much of the tariff impact has already been priced in and how swiftly policymakers can translate trade talks into concrete relief for affected sectors.
