FX.co ★ European Shares Cautious But Set for Strong Q3 Gain

On Tuesday, European stock markets experienced a decline, with the STOXX 50 and the STOXX 600 both dipping by 0.2%, interrupting a two-day winning sequence. This downturn in investor confidence was driven by escalating trade tensions following US President Trump's declaration of an additional 10% tariff on imported timber and lumber. Furthermore, market participants were wary due to the looming threat of a potential US government shutdown, contingent on the failure of Democrats and Republicans to reach a consensus today. On the economic data front, France's Consumer Price Index (CPI) indicated that inflation was increasing at a slower rate than anticipated in the most recent assessment, with similar inflation reports expected from Italy and Germany later today. The oil and gas sector underperformed, with declines observed in Shell (-0.6%), TotalEnergies (-1.2%), and Repsol (-1%). Other prominent companies also saw their shares fall, including SAP (-0.3%), LVMH (-0.3%), and L’Oréal (-0.6%), while Adidas defied the wider market trend, posting a nearly 2% gain. Despite these fluctuations, the STOXX 50 has climbed by 2.9% thus far in September, and the STOXX 600 by 1%. Over the third quarter, the STOXX 50 has advanced by 3.9%, with the STOXX 600 rising by 2.6%.