European Stocks Show Resilience Amid U.S. Tariff Threat; BP Shares Surge After Elliott Management’s Stake-Building Activity

European stock markets started the week on a positive note, ignoring the latest U.S. tariff threat issued by President Donald Trump. This marks a resilient move as markets show signs of confidence despite the escalating trade tensions between the U.S. and its international partners.

• The pan-European Stoxx 600 opened 0.35% higher, while key regional indexes such as the FTSE 100, Germany’s DAX, France’s CAC 40, and Italy’s MIB also reported gains of approximately 0.3%.
• Investor sentiment remains cautious globally, with Asia-Pacific markets showing mixed performance, as trade uncertainties continue to dent market confidence.

Developments:

• U.S. President Trump is set to announce a 25% tariff on steel and aluminum imports. This comes as a response to the growing trade imbalances and has already affected the steel sector.
• ArcelorMittal, Europe’s largest steelmaker, experienced significant declines following Trump’s remarks. The U.S. tariff threat is likely to have a profound impact on steel companies globally.

BP’s Stock Soars Amid Elliott Management Stake-Building

Shares in BP saw a sharp rise of over 8% after reports surfaced of Elliott Management, an activist investor, building a stake in the company. This significant movement in BP’s stock follows rumors of Elliott’s potential influence on BP’s strategic direction.

• BP’s surge signals growing investor interest amid increased activism in the energy sector.

Steel Sector Impact: Thyssenkrupp’s Response to U.S. Tariff Threat

In response to the tariff threat, Thyssenkrupp, one of Europe’s largest steelmakers, indicated it expects minimal impact on its business if the U.S. follows through with the proposed tariffs. However, the company acknowledged that the full impact would be clearer only after the specific tariffs are implemented.

• Thyssenkrupp emphasizes that the majority of its sales in the U.S. come from the automotive supply business, and it maintains a strong local production capacity for the U.S. market. It also highlighted its position in the European market as a primary sales region.

Economic Data & Reports This Week

• The U.S. inflation data on Wednesday is highly anticipated, followed by German inflation and U.K. GDP figures on Thursday. The week will close with European quarterly growth data on Friday.
• On Monday, Mediobanca will release its earnings, and the Munich Security Report will also be published ahead of the MSC Munich Security Conference, which starts on Friday.

Global Steel Demand: Growing Concern Amid Tariff Threats

Despite the growing U.S. tariff concerns, global steel production was projected to rise, but trade barriers could jeopardize this growth. The potential tariffs could disrupt steel supply chains globally, especially as steel production in the U.S. declined by 2.4% in 2024.

• A key point to watch is the ongoing global steel demand, which is expected to face uncertainty as the U.S. positions itself to impose additional import duties on steel and aluminum products.

As the global markets grapple with new tariff threats, European stock markets show strong resilience, while BP’s stock benefits from activist interest. Key economic data and the trade landscape will dictate investor sentiment in the coming days. Keep an eye on the steel market as global demand faces turbulence from ongoing trade negotiations.