European Stocks Surge as Trump Pauses Tariff Plan

European stocks surged in April after US President Donald Trump announced a 90-day pause on new “reciprocal” tariffs, excluding China. The move, unveiled on 9 April, marked a sharp shift from his earlier position favouring historically high tariffs, fueling optimism across European markets.

The rally was strongest among EU indexes, reflecting the bloc’s close trade ties with the United States. For reference, in 2024, the US was the EU’s largest export market (20.6%) and its second-largest source of imports (13.7%), highlighting the stakes for European companies.

In response, the Euro Stoxx 50 jumped 12.4%, climbing from 4,622 points on 9 April to 5,194 date. Italy’s FTSE MIB led the gains with a 16.7% rise, followed by Spain’s IBEX 35 and Germany’s DAX, which advanced 14.04% and nearly 14.0% respectively. France’s CAC 40 posted a 10.4% increase. Meanwhile, outside the EU, the UK’s FTSE 100 rose 10%, moving from 7,679 to 8,448 during the same period.

Italy Leads EU’s April Rebound 

Italy’s FTSE MIB outperformed other European indexes this month, rising 16.7% between 9 April to date.

Among individual stocks, cable and energy systems manufacturer Prysmian [PRY.MI] led the gains with a 17.9% jump, climbing from EUR 40.88 to EUR 48.20.  Tire manufacturer Pirelli [PIRC-I] also advanced sharply, up 14.9% from EUR 4.7 to EUR 5.4 during the same period.

Energy giant Enel [ENEL.MI] then followed with a 13.4% rise, moving from EUR 6.70 to EUR 7.60. Also, sports car maker Ferrari [RACE.MI] advanced 11.6%, from EUR 361.50 to EUR 403.40. Meanwhile, defence contractor Leonardo [LDO.MI] gained 8.7%, and luxury fashion house Moncler [MONC.MI] added 9.4% over the same period. (Source: Yahoo Finance)

Spain’s IBEX and Germany’s DAX Maintain Strong Pulse

Spain’s IBEX 35 and Germany’s DAX have extended their gains into April, maintaining the strong momentum seen so far this year. Since the US temporarily paused tariffs in early April, both indices have risen more than 13%, with the IBEX up 14.04% year-to-date and the DAX advancing almost 14.0%.

In Spain, banks and consumer stocks led the rally. Santander [SAN.E] posted the strongest gains, jumping 22.3% from EUR 5.40 to EUR 6.46. BBVA [BBVA.E] followed with a 16.4% rise, moving from EUR 12.20 to EUR 14.20. Fashion giant Inditex [ITX.E] gained 15.06%, advancing from EUR 42.50 to EUR 48.90.

Meanwhile, in Germany, automakers dominated. BMW [BMW.DE] surged 20.8%, climbing from EUR 63.52 to EUR 76.7. Mercedes-Benz [MBG.DE] rose 19.5% to EUR 55.20, while Volkswagen [VOW.DE] advanced 18.5% to EUR 102.3, driven by optimism over resilient demand and easing global trade tensions.

France and the UK Also See Gains

France’s CAC 40 and the UK’s FTSE 100 also posted gains in April, although at a slower pace than their continental peers. The CAC 40 rose 10.4% during the month, while the FTSE 100 advanced 9.6%, as mentioned earlier.

On a year-to-date basis, France’s benchmark is up 2.5%, and the FTSE 100 has gained 3.2%, reflecting a more cautious recovery compared to Spain’s IBEX and Germany’s DAX.

In France, gains have been held back by weaker prospects for the luxury sector, reflecting broader uncertainty over global trade. In the UK, the outlook has dimmed after the 2025 GDP forecast was cut to 0.8%, compounded by record-low consumer confidence and a sharp decline in factory employment. (Source: Trading View)

Conclusion

The US tariff pause triggered a sharp rally across European markets, with major indexes recording their best month of the year. Gains were strongest in economies closely tied to US trade flows, led by Italy, Spain, and Germany.

However, not all markets moved equally. France and the UK lagged behind, reflecting pressure on luxury goods and a weaker economic outlook, including slower growth and softer consumer sentiment.

Looking ahead, much will depend on whether the trade truce holds and if Europe’s underlying economic resilience can sustain momentum into mid-year.

*Past performance does not reflect future results.