European stocks rose on Monday as investors closely monitored developments in the escalating trade dispute between the United States and China.
The pan-European STOXX 600 index rose 0.5% to 567.40 points, the UK FTSE 100 rose 0.1% to 9,443.15 points, the German DAX rose 0.7% to 24,424.55 points, and the French CAC 40 index rose 0.7% to 7,977.24 points.
This positive performance comes after a week marked by declines in European stock markets, following US President Donald Trump's threat to impose a new round of tariffs on China in response to Beijing's restrictions on rare earth exports.
China controls about 70% of the global supply of rare earths, which are essential components in advanced technology industries, including automotive, defense, and semiconductors.
However, Trump hinted in a post on Truth Social on Sunday that he might not follow through with his threats, saying that trade relations with China will be just fine.
In contrast, China said it was not afraid of a trade war, while a spokesperson for the Chinese Ministry of Commerce accused Washington of double standards after Trump announced on Friday his intention to impose additional tariffs of 100% on Chinese imports.
Asian markets declined on Monday as investors awaited any ramifications of the renewed trade dispute between the two economic powers. Meanwhile, US stock futures rose on Sunday evening, attempting to recover from Friday's sell-off after Trump sought to reassure markets that a new trade war was not imminent.
Today's agenda doesn't include any earnings reports or significant economic data, but investors are anticipating the results of major companies such as ASML, LVMH, and Nestlé this week, as the third-quarter earnings season gets underway.
Traders are also awaiting developments from the annual meetings of the International Monetary Fund and the World Bank, held in Washington this week.
