European stocks were mixed early Monday as investors entered a busy week dominated by geopolitical uncertainty, key earnings reports and the start of the World Economic Forum in Davos, Switzerland.
The pan-European Stoxx 600 index showed little movement after recent gains, while major national indexes like the FTSE 100, DAX, and CAC 40 reflected cautious sentiment ahead of U.S. inflation data and earnings from major companies. This comes after several sessions of strong performance, including record highs in key sectors like utilities and healthcare earlier in the week.
Market Drivers: Geopolitics and Earnings
Investors are keeping a close eye on the Trump administration’s tariff threats against European nations. President Donald Trump has proposed imposing new tariffs starting at 10% on a range of imported goods from countries including France, Germany, Denmark, Sweden, and the UK — potentially rising to 25% by June if negotiations over strategic interests like Greenland proceed. The move has sparked criticism from EU leaders and is weighing on risk sentiment.
Meanwhile, analysts are also looking ahead to earnings season. Data suggest European firms might report the weakest quarterly earnings growth in seven quarters, with a substantial drop expected in revenue and profits compared with last year. That contrasts sharply with the outlook for U.S. companies, which are projected to deliver stronger growth.
Tech & Healthcare Lead, Luxury Stocks Lag
Despite the softer start, parts of the market have shown resilience. Earlier in the week, strong corporate earnings lifted tech and healthcare stocks, pushing the Stoxx 600 to fresh highs. Semiconductor makers and financial firms helped support broader gains, while luxury and media shares lagged.
But on Friday, a pullback in gold prices weighed on mining stocks and trimmed some of the week’s momentum — though the index still managed a multi-session winning streak.
Eyes on Davos and the U.S. Economic Calendar
All eyes are now on the World Economic Forum, where policymakers, business leaders, and investors will tackle issues from global economic growth to geopolitical risks. With U.S. markets closed for Martin Luther King Jr. Day, trading has been thinner than usual — another factor contributing to cautious positioning.
Traders will also be watching key U.S. data releases later in the week, including inflation figures and employment reports, which are expected to set the tone for markets heading into February.
