European Markets React to Trump’s Inauguration and Davos Forum

LONDON — European stocks opened mixed on Tuesday as investors digested the first executive orders signed by newly inaugurated U.S. President Donald Trump and awaited key speeches at the World Economic Forum in Davos, Switzerland.

The pan-European STOXX 600 index opened flat, while Germany’s DAX fell slightly after hitting a record high. Italy’s FTSE MIB and Spain’s IBEX 35 were both in negative territory at 8:15 a.m. London time. Orsted shares plunged 15% after the company reported a 12.1 billion Danish Krone ($1.7 billion) loss linked to its U.S. offshore wind turbine projects. European automakers Stellantis and BMW also declined amid concerns over potential U.S. tariffs.

Global investors are assessing the potential impact of Trump’s second term following his inauguration as the 47th U.S. president on Monday. Trump addressed 20,000 supporters at the Capital One Arena in Washington, D.C., and later announced plans to impose tariffs on Canada and Mexico starting Feb. 1, causing the loonie and peso to plummet.

In the U.K., private sector wages rose 6% in the three months to November compared to the previous year, according to the Office for National Statistics. However, November payroll figures fell by 0.1% from October, signaling a weakening labor market. Lloyds Banking Group CEO Charlie Nunn predicted three interest rate cuts by the Bank of England in 2025, aligning with market expectations.

In Davos, the World Economic Forum kicked off with high-profile speeches. European Commission President Ursula von der Leyen, Chinese Vice Premier Ding Xuexiang, German Chancellor Olaf Scholz, and Ukrainian President Volodymyr Zelenskyy are set to address the forum. Zelenskyy’s speech is particularly significant as Ukraine faces potential pressure from Trump to negotiate a ceasefire with Russia.

Elsewhere, Austria’s Raiffeisen Bank International announced it would set aside funds following a 2 billion euro ($2.08 billion) ruling against it by a Russian court. The bank is the largest Western financial institution operating in Russia.

Market volatility continued as Trump’s tariff threats and trade negotiations kept investors on edge. The U.S. dollar fluctuated, while China‘s central bank strengthened the yuan to its highest level since early November. Bitcoin surged to a new all-time high above $109,000 before retreating below $102,000.

Key economic data releases on Tuesday include the U.K. unemployment rate for November and Germany’s ZEW economic sentiment survey. EU finance ministers are meeting in Brussels to discuss competitiveness, with ECB Vice-President Luis de Guindos in attendance.