European stocks continued to strengthen on Monday, October 27, 2025, as markets grew more confident after the US and China announced they had a preliminary framework for a trade agreement. The pan-European STOXX 600 index rose around 0.2%, Germany's DAX index moved up around 0.1%, and the UK's FTSE 100 gained around 0.7%. Investors saw signs that trade tensions between the world's two largest economies were beginning to ease, making the risk of a global recession feel slightly less looming.

This gain comes after an already very strong week. The FTSE 100 just hit a record close above 9,600 points, supported by banking, energy, and commodity stocks, which were also lifted by higher oil and gold prices. The STOXX 600 itself also broke a record a few days ago, helped by energy and utilities sectors, which rose due to US sanctions on major oil producer Russia and expectations that borrowing costs in the West would fall further. The market is essentially saying: "The soft landing story is still alive."

European traders' focus now shifts to two major issues: 1) the possibility of further interest rate cuts from the US Fed, which could boost global liquidity and help European stocks, and 2) this week's earnings reports from major European companies in the banking, energy, and technology sectors of the STOXX 600. If earnings remain strong while US-China trade tensions ease, the European bull case could continue until the end of the year. However, if data weakens or a trade deal falls through at the Trump-Xi level, this rally could easily be broken. (asd)

Source: Newsmaker.id