European stocks rally as traders await UK-U.S. trade deal; central banks, earnings in focus

European stocks traded higher Thursday amid a swathe of earnings reports and expectations of an imminent U.K.-U.S. trade deal.

The pan-European Stoxx 600 was 0.6% higher at 2 p.m. in London, extending earlier gains after an interest rate cut from the Bank of England.

The U.K.’s FTSE 100 reversed gains earlier in the session to trade flat%, while France’s CAC 40 and Germany’s DAX each added 0.8%.

• Maersk cuts container market outlook on U.S.-China trade tensions | view post
• Puma shares pop 8%, says it won’t lead on U.S. price increases | view post
• Siemens Energy upgrades outlook but expects multimillion dollar profit hit from tariffs | view post
• AB InBev first-quarter profits rise ahead of forecasts | view post
• Banco Sabadell reports 58.6% profit jump in first quarter | view post
• Sweden’s Riksbank holds rates steady at 2.25% | view post
• Rheinmetall shares rise after earnings beat | view post

Britain is set to sign a trade deal with the U.S., making it the first country to do so after the world’s largest economy announced stiff “reciprocal” tariffs against friends and foes alike in April. President Donald Trump confirmed Thursday that a deal had been struck and will be announced 10 a.m. ET.

“The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come,” Trump said in a post on his Truth Social social media platform.

As the U.K. prepared to make an announcement on strengthening its trading relationship with Washington, the EU announced it was preparing to launch a WTO complaint against the United States over the Trump administration’s tariffs regime.

“It is the unequivocal view of the EU that these [U.S.] tariffs blatantly violate fundamental WTO rules,” the European Commission said in a statement.

The bloc also said it was launching a public consultation on a list of U.S. imports worth 95 billion euros ($107.5 billion) that could be subject to new import duties as a part of EU retaliatory measures.

In London, the Bank of England on Thursday cut its key interest rate by 25 basis points, bringing it down to 4.25%. The central bank’s Monetary Policy Committee voted by a 5 to 4 majority to reduce rates by 25 basis points. Two of its members voted to cut rates by 50 basis points, while another two wanted to hold rates steady.

It came after Sweden’s Riksbank held its key interest rate steady, citing uncertainty in the global economy as a direct result of U.S. President Donald Trump’s trade policies. A day earlier, Norway’s central bank Norges Bank also kept interest rates unchanged, noting that “trade barriers have … become more extensive, and there is uncertainty about future trade policies.” 

On the corporate front, earnings came from Maersk, Siemens Energy, Heidelberg Materials, Henkel, Infineon, Lanxess, Puma, Rheinmetall, Bosch, Norwegian Air, Swisscom, Zurich Insurance, Adecco Group, InterContinental Hotels Group and Banco Sabadell.

U.S. stock futures rose Thursday after Trump’s comments on a trade deal with the U.K. Also in focus was the Federal Reserve’s latest policy decision — the U.S. central bank held steady on rates as it highlighted rising inflation and unemployment risks.

The Federal Open Market Committee held its benchmark overnight borrowing rate in a range of between 4.25% to 4.5%, where it has been since December. The decision was largely expected.

Fed Chair Jerome Powell warned in his press conference that if the significant tariff hikes already announced remain at current levels, they could lead to a slowdown in economic growth and an uptick in long-term inflation.

Asia-Pacific markets traded mixed overnight after the Fed’s decision, with investors awaiting updates on the upcoming U.S.-China trade talks. U.S. Treasury Secretary Scott Bessent and his Chinese counterpart are set to meet in Switzerland this week to address the countries’ deep trade dispute and economic issues.