European stocks up as U.S. trade policy comes back into focus; Pandora falls as CEO announces retirement

LONDON — European stocks edged higher on Tuesday as investors monitored U.S. President Donald Trump’s trade tariffs and the continued political deadlock in the United States.

The pan-European Stoxx 600 index had gained 0.2% by 2:00 p.m. in London (9:00 a.m. ET), with the FTSE 100 and DAX each adding 0.2%, while the CAC 40 was down 0.2%.

Looking at individual stocks, shares of Danish jewelry giant Pandora lost 1.9% by early afternoon, after the company said its CEO, Alexander Lacik, would retire in March. The firm’s Chief Marketing Officer Berta de Pablos-Barbier — a former LVMH executive — is set to replace him.

Meanwhile, shares of German airline group Lufthansa were down about 7%. The company announced on Monday that it would cut 4,000 jobs by 2030. Tuesday’s moves wiped out much of the gain the stock saw on Monday as investors reacted to Lufthansa’s Capital Markets Day, where the firm announced — alongside the staff cuts — plans to expand its aircraft fleet, as well as new medium-term financial targets including an adjusted EBIT margin of 8 to 10%.

In a note to clients on Tuesday morning, UBS analysts said Lufthansa “shares are attractive if financial targets can be met.”

“The margin target of 8-10% is more challenging than the previous medium-term target of 8% [but] we think that the 8% plus margin target is achievable,” they said.

Global investors will be keeping an eye on the tariff landscape this week after Trump said Monday that he would impose a 10% tariff on imported timber and lumber and an initial 25% duty on imported kitchen cabinets, bathroom vanities and upholstered furniture, before the tariff rate rises next year. Trump said such imports were threatening the U.S. economy and eroding national security. 

A potential federal government shutdown will also be closely followed by international markets this week after top Democrats and Republicans met with Trump at the White House on Monday.

After the meeting, Vice President JD Vance said: “I think we’re headed to a shutdown because the Democrats won’t do the right thing.”

Although shutdowns aren’t usually market-moving events, this time could be different as investors are already wary about a slowing labor market, the risk of stagflation and elevated stock valuations.

A shutdown could also prompt rating agencies to rethink the status of U.S. credit, which was downgraded in May by Moody’s.

In other news, the U.K.’s Labour Party continues its annual conference in Liverpool on Tuesday with Prime Minister Keir Starmer set to address delegates later today. Finance Minister Rachel Reeves’ conference speech on Monday afternoon saw her give few clues away as to her plans for the Autumn Budget, in which she is expected to announce tax rises.

U.S. stock futures were little changed overnight as investors looked to close out an unusually strong September by building on Monday’s momentum.

Meanwhile, Asia-Pacific markets traded mixed as official Chinese data showed manufacturing activity contracted for a sixth straight month.

— CNBC’s Pia Singh contributed to this market report.