European stock markets surged on Monday, supported by a wave of investor optimism following temporary US tariff exemptions on key technology imports and a notable rally in pharmaceutical stocks, CNBC reports.
The pan-European Stoxx 600 index climbed 2.2% in midday trading, with all major sectors trading in positive territory. Technology shares led the advance, rising 2.8%, while oil and gas stocks gained 3.7% despite expectations of weaker global oil prices in 2025. Banking stocks also posted strong performances, up nearly 3%.
The market rally was triggered in part by news from the US that several categories of electronics — including smartphones, computers, and semiconductors — would be temporarily exempt from new tariffs under President Donald Trump’s “reciprocal tariff” framework. While the exemptions eased immediate concerns for global tech and supply chains, officials emphasized that the relief is temporary and could be reversed depending on national security reviews and ongoing trade negotiations.
The European Union has also paused its own retaliatory tariffs for 90 days, signaling a potential window for diplomatic engagement amid rising global trade tensions.
Among standout performers, Novo Nordisk shares rose nearly 4.5% after US rival Pfizer halted the development of its experimental daily weight loss pill following a liver-related side effect in a patient. The development boosted investor confidence in Novo Nordisk’s market position in the weight-loss drug segment, where it leads with products like Ozempic and Wegovy.
Other tech-related gains included Logitech, up nearly 9%, and British firm Convatec, which added almost 7%. Danish audio manufacturer GN Group and energy services firm Technip Energies also posted strong gains.
The broader rally comes amid a backdrop of high volatility. European equities had underperformed in April, with the Stoxx 600 down over 8% month-to-date, while US markets have also declined since the introduction of Trump’s latest round of tariffs. Analysts at Deutsche Bank described the current period as “one of the most tumultuous in living memory,” citing dramatic swings in stock and bond markets.
In currency markets, the euro and the British pound extended their gains against a weakening US dollar, driven in part by global trade uncertainty and shifting expectations for central bank policy responses.
Looking ahead, markets remain sensitive to upcoming developments, including President Trump’s pending announcement on semiconductor tariffs, corporate earnings reports from firms like LVMH and Goldman Sachs, and inflation data set to influence the European Central Bank’s Thursday meeting.
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