Investing.com - European stock markets were broadly steady on Tuesday, stemming a sell-off in the prior session that was linked to fears around the impact of President Donald Trump’s tariff plans on the U.S. economy.
The pan-European Stoxx 600 was mostly unchanged, following a decline to the benchmark lowest level in almost a month on Monday. An index tracking the region’s banking sector dipped by 0.8%, while a separate gauge of the travel and leisure shed 1.6%.
Investors were also eyeing ongoing discussions over fresh military and infrastructure spending plans between the parties who will likely form Germany’s next coalition government.
Germany’s Greens, however, have said they would block the proposals, which have been touted by Friedrich Merz -- the anticipated chancellor-in-waiting of Europe’s largest economy -- as necessary steps to address urgent concerns over defense and wider economic malaise.
The refusal to back the expenditures, as well as a loosening of Berlin’s longstanding borrowing limits, threatens to derail an agreement between Merz’s conservatives and current Chancellor Olaf Scholz’s Social Democratic Party that had excited global markets.
Still, the Greens have put forward rival plans as part of a bid to secure a compromise deal.
By 05:15 ET (09:15 GMT), the DAX index in Germany had risen by 170 points or 0.8%, the CAC 40 in France had 44 points or 0.5%, and the FTSE 100 in the UK had slipped by 11 points or 0.1%.
Volkswagen guidance in focus
In individual stocks, Volkswagen (ETR:VOWG_p) issued a cautious outlook for 2025, reflecting ongoing global trade tensions, intensifying competition, and broader economic uncertainties.
Despite posting solid financial results for 2024, the German automaker anticipates only modest growth in sales revenue for the coming year, with expectations set at a maximum increase of 5% compared to 2024.
The company projects its operating return on sales to fall within the range of 5.5% to 6.5%, signaling a measured approach to the year ahead.
“Our outlook reflects the global economic challenges and the profound changes that are happening in the industry,” said CFO Arno Antlitz in a statement.
Shares in Volkswagen ticked slightly higher in early dealmaking, while the Stoxx automobiles and components index inched up by 0.9%.