Stock Markets in Europe Predicted to Rise as Trump's Tariffs Encounter Legal Obstacles

The global financial landscape is showing mixed signals as various economic indicators and legal developments are shaping the market landscape.

The U.S. dollar index remains steady ahead of the much-anticipated monthly jobs report and reports on manufacturing and service sector activity, indicating a cautious optimism among investors. Meanwhile, U.S. stocks ended lower on Friday, with the S&P 500 declining 0.6 percent, the tech-heavy Nasdaq Composite losing 1.2 percent, and the Dow slipping 0.2 percent.

In the realm of trade, the U.S. Commerce Department has revoked exemptions for Intel, Samsung, and SK Hynix to import advanced chipmaking tools for use in China without prior approval. This move is likely to escalate tensions between the two economic powerhouses.

The European economy is also in focus, with European PMIs for August, EU unemployment data for July, a speech by ECB President Christine Lagarde, and appearances by ECB Board members Piero Cipollone and Isabel Schnabel expected to be significant economic news. However, European stocks fell on Friday, with the pan European STOXX 600 giving up 0.6 percent, the German DAX dipping 0.6 percent, France's CAC 40 shedding 0.8 percent, and the U.K.'s FTSE 100 easing 0.3 percent.

Inflation is another key concern, with data showing that core PCE, a key inflation measure watched by the Federal Reserve which excludes the costs of food and energy, rose 2.9 percent in July, reaching its highest level since February. This could potentially push the Federal Reserve to consider a rate cut at their meeting on Sept. 17, as U.S. money markets are pricing an 84 percent chance of a 25 basis-point rate cut.

The energy sector is also experiencing volatility, with Brent crude futures extending declines after notching their first monthly loss since April on concerns over a potential glut. On the contrary, gold jumped about 1 percent to hover near $3,480 per ounce, reflecting investor uncertainty.

Looking ahead, the European stock market is expected to open higher on Monday, while French bond spreads are likely to stay elevated ahead of the September 8 confidence vote in parliament.

In legal news, a federal appeals court has ruled that President Donald Trump's tariffs on China, Mexico, and Canada were illegal. The ruling, made by the United States Court of Appeals (a federal appellate court), previously ruled against Trump's wide-reaching tariffs on imports from China, Mexico, Canada, and other countries. The Trump administration has a window to appeal the ruling to the Supreme Court until October 14.

Asian markets were mostly lower due to disappointing factory output data and concerns about slowing growth in the artificial intelligence sector.

These developments underscore the dynamic nature of the global economy, with various factors influencing market movements and investor sentiment.

Stock Markets in Europe Predicted to Rise as Trump's Tariffs Encounter Legal Obstacles