European Stocks Rally As EU Cuts Tariff Deal With U.S.

European stocks rose after the United States and the European Union (EU) reached a tariff agreement, easing concerns of a prolonged trade war.

EU Commission President Ursula Von der Leyen said the tariff would be all-inclusive, although Trump noted it would exclude pharmaceuticals and metals. I Photo: Euronext X

The Stoxx Europe 600 Index gained 0.8% at 8:18 a.m. in London, with trade-exposed automakers and luxury goods stocks outperforming, Allegra Catelli, Sagarika Jaisinghani, and Gary Parkinson reported for Bloomberg News .

The pact, which imposes a 15% tariff on most EU exports—including autos—was announced Sunday by President Donald Trump after a meeting with European Commission President Ursula von der Leyen.

Von der Leyen said the tariff would be all-inclusive, although Trump noted it would exclude pharmaceuticals and metals.

News of the deal had a more muted effect in currency markets, where the dollar edged higher on Monday. Bond yields in both the U.S. and Europe declined.

The trade agreement is “good enough to unlock what equity markets needed most: visibility,” said John Plassard, head of investment strategy at Cité Gestion.

“Tariff escalation risk is now off the table, and with that, a major macro overhang disappears. For investors, that’s not just a sigh of relief—it’s a green light.”

Among automakers, Stellantis NV rose 3.1%, Volkswagen AG gained 2.2%, Mercedes-Benz Group AG added 1.8%, and Porsche AG jumped 3.5%. Auto parts suppliers Valeo SE and Forvia SE also advanced.

As of Friday, the Stoxx 600 autos sector remained little changed on the year, having missed out on Europe’s broader equity rally.