Europe markets open: Stocks rise with DAX up 0.5% despite US-China tensions

A curious and perhaps fragile sense of optimism is gracing European markets at the start of a new trading week, with stocks opening firmly in the green as investors choose to look past a fresh and bitter trade dispute brewing between the United States and China.

This bullish start is a direct bet on a weekend of presidential reassurance over a week of escalating threats, but it is a conviction that could be tested as a new earnings season begins.

The pan-European Stoxx 600 was up 0.3 percent shortly after the opening bell, with the positive momentum being led by the continental powerhouses.

Germany’s DAX climbed 0.5 percent and France’s CAC 40 added 0.6 percent, a strong and confident start to the week.

The Trump whiplash: From a declaration of war to an offer of peace

This rally is taking place against a backdrop of profound and deeply confusing geopolitical signals.

The previous week had ended on a sour note, with European markets selling off after President Donald Trump threatened China with a fresh and powerful wave of tariff increases.

The move was a direct retaliation for new Chinese export controls on rare earth minerals, a sector where Beijing holds a near-monopolistic grip.

But after a weekend of high tension, which saw China defiantly declare “we are not afraid of” a trade war, the US president appeared to completely reverse his stance.

In a Truth Social post on Sunday, he seemed to suggest he might not follow through on his threat, posting that trade relations with China “will all be fine.”

This presidential whiplash, from a declaration of war to an offer of peace in the space of 48 hours, has been seized upon by a market desperate for a positive catalyst.

A week of Tests, a season of reckoning

This fragile optimism is now set to be tested. While the immediate economic calendar is light, the week ahead is a crucial one.

The world’s financial leaders will be gathering in Washington for the annual meetings of the IMF and the World Bank, a key forum for assessing the health of the global economy.

More consequentially for the market, the third-quarter earnings season is about to begin, with a slate of reports from European giants like ASML, LVMH, and Nestle set to provide a real-world verdict on the state of corporate health.

After a weekend of confusing signals and a morning of surprising strength, the market is about to get a dose of hard data.

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