Market Overview: European stock markets give back gains, U.S. index futures rise slightly

European stock markets gave back earlier gains, while U.S. stock index futures rose slightly as investors assessed U.S. President Donald Trump's latest tariff threats, disappointing economic data, and a slew of corporate earnings reports.

The Stoxx Europe 600 index was little changed after rising 0.4%, as earnings from some large companies in the region were mixed. S&P 500 futures rose about 0.3%, with traders awaiting earnings reports from companies like McDonald's and Walt Disney.

Data released on Tuesday showed a weak performance in the U.S. services sector, while price pressures remained high, raising concerns about challenges to Federal Reserve policy. Trump intensified his tariff offensive, stating he would impose tariffs on countries purchasing energy from Russia and would soon announce tariffs on semiconductor and pharmaceutical imports. Nevertheless, strong corporate earnings and bets on interest rate cuts are currently boosting the stock market.

Catherine Brooks, Director of Research at XBT, stated, "Overall, decent corporate earnings on both sides of the Atlantic are supporting the stock market, which somewhat alleviates concerns about the impact of a slowing U.S. economy and President Trump's ongoing obsession with tariffs on the global economy."

U.S. stock markets are nearing historical highs as investors flock back to tech giants and AI-related trades amid signs that economic growth may slow. Paul Sciavone, a macro trader at Goldman Sachs, noted that betting on a reversal of market momentum "almost seems unreasonable."

Mark Haefele, Chief Investment Officer at UBS Wealth Management, indicated that any sell-off would provide opportunities for stock investors, but they should be prepared for volatility.

Haefele remarked, "While trade uncertainties and high valuations may pose slight resistance to the stock market in the short term, investors should consider ways to manage volatility while positioning for long-term gains. Those who have allocated stocks according to strategic benchmarks should consider implementing short-term hedges, while under-allocated investors should be ready to increase exposure in the event of a market downturn."

U.S. Treasury yields fell, with the 10-year Treasury yield rising 3 basis points to 4.24%, ahead of a 10-year Treasury auction later on Wednesday. The dollar index remained stable.

In other European news, German factory orders unexpectedly fell for the second consecutive month in June, as the outcome of the U.S.-Europe trade agreement remains unclear. Previously, outgoing European Central Bank Governing Council member Robert Holzmann stated that the ECB should not lower borrowing costs again.

Meanwhile, Swiss President Karin Keller-Sutter arrived in Washington for last-ditch efforts to reduce the 39% tariffs imposed by Trump last week and to seek an agreement.

In commodities, oil prices rose slightly after four consecutive days of decline, as investors awaited whether Donald Trump would impose secondary tariffs on Russian energy buyers to increase pressure on Moscow