Investing.com - European equity indices were mostly higher on Tuesday, with hopes growing that potentially costly trade battle between the U.S. and the European Union can be averted.
The DAX index in Germany gained 1%, the CAC 40 in France was flat and the FTSE 100 in the U.K. jumped 0.7%.
The continent-wide STOXX 600 closed 1% higher in the previous session, when the U.K. was on holiday, after U.S. President Donald Trump agreed to extend the tariff deadline on the European Union to July 9 from June 1 after a conversation with European Commission President Ursula von der Leyen.
Von der Leyen, in a post on X, expressed optimism, stating that the EU is prepared to move forward with negotiations “swiftly and decisively.”
German consumer sentiment on the rise
The tone was also helped by a survey, released earlier Tuesday, indicating that German consumer sentiment is set to improve again slightly heading into June.
The consumer sentiment index , published by GfK market research institute and the Nuremberg Institute for Market Decisions, rose by 0.9 points month on month to -19.9 points.
It was the overall indicator’s third monthly increase, even if the rate of recovery slowed heading into June.
Elsewhere, French consumer prices rose less than anticipated in May, signalling subdued inflationary pressure which could help the European Central Bank sanction another interest rate cut, potentially in early June.
"This normalisation [of interest rates in the eurozone] is probably not complete, and we are likely to see this at our governing council next week," ECB policymaker Francois Villeroy de Galhau said in a speech earlier Tuesday.
The ECB is scheduled to meet on June 5, with financial markets expecting that it would lower its key deposit facility rate to 2.00% from 2.25% - which would be its eighth rate cut in a row.
Saab reiterates strong growth targets
In the corporate sector, Swedish defence material maker Saab (ST: SAABb ) reiterated its 2023-2027 targets for organic sales growth of around 18%, riding a surge in demand as Europe scrambles to re-arm in an uncertain geopolitical security landscape.
Europe’s defence stocks are in the spotlight the day after President Trump said he would recommend additional sanctions on Moscow, amid escalating tensions between Russia and Ukraine
Elsewhere, Volvo (OTC: VLVLY ) Cars (ST: VOLCARb ) will cut 3,000 mostly white-collar jobs as part of a restructuring announced last month as it grapples with high costs, a slowdown in electric vehicle demand and trade uncertainty.
Crude slides ahead of OPEC+ meeting
Oil prices declined Tuesday ahead of a closely watched OPEC+ meeting that could provide key signals on future supply levels.
At 11:41 ET, Brent futures dropped 1.7% to $63.02 a barrel, and U.S. West Texas Intermediate crude futures declined 1.9% to $60.34 a barrel.
The Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, are weighing the possibility of another production boost at their upcoming meeting later this week, Bloomberg News reported last week.
According to reports, one option under consideration is a supply increase of 411,000 barrels per day in July, though no final decision has been made.
OPEC+ has been in the process of unwinding output cuts, announcing additions to the market in May and June.