Investing.com – European stock markets edged higher on Wednesday, but their gains were limited amid caution over the economic outlook as the new Trump administration maintained the threat of tariffs on trade.
At 3:05 a.m. ET (08:05 GMT), the German index rose 0.6%, the French index 0.1% and the British index 0.2%.
Trade war threats weigh
Donald Trump was sworn in as the next president of the United States on Monday, returning to the White House after a four-year hiatus, and he reiterated his threat to impose tariffs on European goods entering the United States .
He also said his administration was considering imposing additional 10% tariffs on goods imported from China, starting in February.
Europe will respond proportionately to any US tariffs, EU Economy Commissioner Valdis Dombrovskis said on Wednesday.
“If it is necessary to defend our economic interests, we will respond in a proportionate manner,” Dombrovskis said in an interview with CNBC at the World Economic Forum in Davos, Switzerland.
Lagarde expected in Davos
There are no major data releases in Europe on Wednesday, and the focus will likely remain on Davos, with the president of the European Central Bank leading a series of interventions by ECB officials talking about interest rates.
The central bank is expected to cut its benchmark rate by 25 basis points next week, the first reduction in a period expected to be at least four basis points this year, as the region suffers growth headwinds.
ECB policy chief Klaas Knot backed the idea of short-term cuts in an interview on Wednesday.
“I am quite satisfied with the market’s expectations for the two upcoming meetings and, beyond that, I find it too early to comment,” the Dutch governor said on Bloomberg TV.
EasyJet reduces its operating loss
On the corporate side, easyJet (LON:) shares rose around 1% after the budget carrier reported a smaller first-quarter operating loss due to lower fuel costs and strong passenger demand for travel and its vacation packages.
Chocolate maker and cocoa processor Barry Callebaut (SIX:) announced lower-than-expected sales volume for its first quarter, affected by order delays amid record cocoa prices.
The technology sector will also be in the spotlight following the announcement that OpenAI, SoftBank (TYO:) and Oracle (NYSE:) will form a company to invest $500 billion in AI infrastructure in the United States, and after streaming giant Netflix (NASDAQ:) reported a record subscriber gain last quarter.
Crude falls on plans to increase US production
Oil prices fell Wednesday, adding to losses from the previous session following President Trump’s declaration of a national emergency to ramp up energy production.
At 3:05 a.m. ET, U.S. crude (WTI) futures fell 0.5% to $75.43 per barrel, while the contract fell 0.4% to $78.97 per barrel.
Benchmarks fell Tuesday after Trump outlined his plan to maximize oil and gas production, including declaring a national energy emergency to help roll back environmental protections and withdrawing the United States from the United States pact. Paris on the climate.