The City of London skyline at sunset.
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LONDON — European stocks opened higher on Wednesday as global market nerves eased after U.S. President Donald Trump’s universal 10% tariff came into effect rather than the threatened higher 15% rate.
The pan-European Stoxx 600 was 0.5% higher just after the open, and the U.K.’s FTSE 100 rose 0.8%, while Germany’s DAX and France’s CAC 40 added roughly 0.3%.
It’s another busy day of earnings Wednesday with Iberdrola, E.ON, Bayer, Ferrovial, Heidelberg Materials, Poste Italiane, Fresenius, Novonesis and Telefonica. Data releases include German GDP and consumer confidence and the latest euro zone inflation figures.
British spirits company Diageo was down 7% in early trading after lowering its 2026 sales and profit outlook on Wednesday. The world’s biggest spirits maker reported that weaker demand from North America and China had impacted earnings in its fiscal first quarter.
Net sales declined by 4% to $10.5 billion in the six months to December, as the company cited “pressure on disposable income impacting US Spirits.” Operating profit was also 1.2% lower at $3.1 billion.
Diageo is now expecting further weakness in 2026, with organic sales projected to be 2 to 3% lower, organic operating profit to be flat to up low single digits, and cut dividends to 20 cents per share.
HSBC reported earnings ahead of the opening bell, with the bank reporting an annual pre-tax profit of $29.91 billion, beating estimates.
The positive open for European stocks comes after regional bourses closed higher Tuesday as investors assessed the new global trading landscape after Trump’s latest tariff move. In his State of the Union speech Tuesday night, Trump said he believed his tariffs would replace income tax.
“As time goes by, I believe that tariffs, paid for by foreign countries, will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love,” the president said.
U.S. stock futures were slightly higher Tuesday night ahead of a key earnings report from Nvidia, which comes at a time when investors are recalibrating lofty tech stock valuations and are increasingly skeptical on hyperscalers’ high AI capital expenditures.
In Asia-Pacific markets, South Korea and Japan stocks hit record highs overnight.
— CNBC’s Garrett Downs contributed to this market report.
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