Market Analysis

European Stocks Stall as Earnings Reports Continue to Pour In

Mellissa · 24 Apr41.2K Views

Image Credit: Reuters

European equity indices mostly edged lower on Thursday as a relief rally stalled, with investors processing a slew of quarterly earnings reports.

At 03:05 ET (07:05 GMT), the German DAX dropped 0.3%, the French CAC 40 slipped 0.5%, and the UK’s FTSE 100 traded flat.

Relief Rally Loses Steam European stock markets had posted strong gains on Wednesday as concerns about a U.S.-China trade war eased. However, the relief rally faltered as investors grew cautious about the recent optimism regarding a potential easing of tariffs between the two largest economies.

Despite President Trump’s new tariffs raising recession concerns in recent weeks, analysts at Deutsche Bank noted that the market hasn’t fully priced in a recession yet. “Equity declines have been less severe than during recent recessions, and credit spreads and oil prices have only widened modestly,” they stated. This suggests that markets do not yet foresee a recession, especially if the latest tariff increase is postponed for 90 days.

However, if an economic slowdown does occur, the stock market could face significant risks.

German Ifo Index Update Thursday’s main economic highlight will be the German Ifo index, which is expected to show a decline in business confidence for April in Europe’s largest economy. Recent activity indicators have shown a slowdown in European business growth, partly due to the threat of U.S. tariffs. The eurozone’s preliminary composite Purchasing Managers’ Index (PMI) dropped to 50.1 in April from 50.9 in March, barely above the growth-contraction threshold.

Earnings Season in Full Swing The European earnings season is underway, with several major companies reporting results.

STMicroelectronics forecasted improved earnings for Q2, calling the first quarter the "bottom point" of the year.
Unilever exceeded first-quarter sales expectations and reaffirmed its 2025 outlook.
Renault posted a 0.6% rise in Q1 revenue, benefiting from recent vehicle launches.
BNP Paribas met earnings expectations, with its investment bank showing strong sales, maintaining profit forecasts despite a tough economic outlook.
Nestle reported better-than-expected Q1 sales growth, driven by higher prices, although the impact of U.S. tariffs on its business remains unclear.
Roche reported a 7% rise in first-quarter sales, boosted by its cancer and allergy treatments.
Nokia reported lower-than-expected profits for Q1, citing short-term disruption from U.S. tariffs.

Oil Prices Steady After Previous Drop Oil prices stabilized on Thursday after a sharp drop the previous session, triggered by reports of increased supply from OPEC.

As of 04:05 ET, Brent crude futures rose 0.8% to $62.75 per barrel, while U.S. West Texas Intermediate crude increased 0.7% to $66.58 per barrel.

Both contracts had fallen around 2% on Wednesday after Reuters reported that OPEC and its allies, including Russia, are pushing for a faster increase in output in June, following May’s surprise boost. OPEC+ is scheduled to meet on May 5 to finalize the June production plan, even as oil prices remain near four-year lows amid concerns over the U.S.-China trade war and oversupply. The U.S. Energy Information Administration reported a small increase of 244,000 barrels in crude inventories for the week ending April 18, defying expectations of a 770,000-barrel draw.