European stock markets saw a dramatic boom on Monday, thanks in large part to optimism over possible tariff relief from the U.S. Stoxx 600 index, up 1.6% on the day. Even with some uncertainty from the U.K. and other parts of Europe, this increase is a sign that investors’ confidence continues.
In the U.K., the new count of payrolled employees decreased by 0.3% since last month. There was a decline of 0.2% compared to March of last year. These alarming trends add to fears of labor market precarity against the familiar landscape of increasing costs and economic insecurity. Wage growth has been remarkably resilient. Year-on-year, the 5.9% figure not including bonuses was up from 5.8% in the three months to November. Including bonuses, wage growth came in at 5.6%.
The most recent employment data from the U.K. indicate an uptick in the employment rate. Its 0.2 percentage point increase to 75.1% from December 2024 to February 2025. As activity in the labor market continues to slow, experts warn about its effect on future hiring plans.
“These figures indicate that labor market activity was sluggish in the run-up to this month’s substantial surge in tax and tariff costs, with unease over these twin threats limiting hiring plans.” – Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
Futures on one of the U.K. stock index, the FTSE 100 index, are still modestly positive, with the index expected to open 17 points higher at 8,136. Technology continued to lead the German DAX higher, up 15 points to 20,922. Meanwhile, France’s CAC 40 experienced a slight dip, closing lower at 7,221, while Italy’s FTSE MIB climbed by 135 points to reach 34,180.
European equity markets are having a great day today, largely due to the news that the U.S. is dropping its tariff on imported steel and aluminum. The hit Trump just announced – earlier this month, the Trump administration decided to impose a 25% tariff on all foreign cars coming into the United States. In response, the European Union just announced they would suspend their own countertariffs for 90 days. This is a positive step to spur more discussion about our trade relations.
Citi analysts Thomas Chauvet and Mahesh Mohankumar commented on the current situation, stating, “Whilst it seems clear that at the very least EU OEM US import tariffs will remain in place, the time of peak tariff panic may now be behind us.”
Investor sentiment appears buoyed by a recent exemption granted to certain tech items from U.S. tariffs, which has contributed to a positive start for regional markets this week.
In corporate news, luxury goods behemoth LVMH posted a larger-than-expected 3% drop in quarterly sales from a year ago. This outcome was well below what analysts had expected, which was minimal growth. The company’s market capitalization stands at 248.2 billion euros ($281.6 billion), narrowly surpassing Hermes’ valuation of 246 billion euros. Following the report, LVMH’s shares dropped by 6% as of 9:49 a.m. London time.
The continued softness of the jobs market, commented Ashley Webb, a U.K. economist at Capital Economics. Still, she said, there are few indicators pointing to this driving inflationary wage growth. She cautioned that unpredictability stemming from recent U.S. tariffs might depress companies’ hiring plans. When and if that occurs, wage increases may slow down more noticeably.
“While the jobs market softened further, there were few signs of this feeding through to slower wage growth,” Webb stated.
European markets remain buoyed by prospects of a trade tariff negotiating de-escalation and overall strong investor appetite. That positive trend continues despite a decline in warmer signals like employment and wage growth.
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