European stock markets ended in positive territory on Tuesday, buoyed by ongoing diplomatic negotiations aimed at ending the conflict in Ukraine and anticipation surrounding the upcoming Federal Reserve (Fed) symposium in Jackson Hole.

In Paris, the CAC 40 rose 1.21% to 7,979.08 points. Frankfurt’s DAX advanced 0.50%, while London’s FTSE 100 gained 0.34%.

The EuroStoxx 50 climbed 0.94%, the FTSEurofirst 300 increased by 0.69%, and the Stoxx 600 was up 0.73%.

This Tuesday, attention remained firmly fixed on trade developments.

Three days after a bilateral summit with Russian President Vladimir Putin in Alaska–where no ceasefire was reached in Ukraine–Donald Trump hosted talks in Washington on Monday with Ukrainian President Volodymyr Zelensky and several European leaders.

The Europeans, who reconvened via videoconference on Tuesday to review the previous day’s discussions, remain vigilant to ensure that no deal is struck between Donald Trump and Vladimir Putin at the expense of Kyiv and its allies.

The White House occupant announced preparations for a meeting between the Russian and Ukrainian presidents, which could take place within two weeks, according to German Chancellor Friedrich Merz.

Beyond geopolitics, the key event of the week will be the Federal Reserve’s symposium in Jackson Hole, scheduled from August 21 to 23. Fed Chair Jerome Powell is expected to speak on Friday about economic prospects and the central bank’s policy framework.

His comments will be closely monitored, as the Fed remains concerned about persistent inflation and signs of slowing growth. Futures markets are pricing in at least two 25-basis-point rate cuts this year, reflecting expectations that the Fed will prioritize economic growth.

“The question is to what extent the Fed is willing to overlook inflation data because it believes it is skewed by tariffs,” said Ian Samson, portfolio manager at Fidelity International.

SECTORS

The European defense sector retreated as progress was reported in Ukraine conflict negotiations.

Leonardo dropped 10.16%, Rheinmetall lost 4.85%, Dassault Aviation fell 3.10%, and Thales declined 4.11%.

“The Zelensky-Trump meeting may have fueled speculation about a softening stance on the Ukrainian conflict, but I see today’s decline more as a short-term reaction than a change in fundamentals,” noted Marcus Gavelli, analyst at Pareto Securities.

ON WALL STREET

At the European close, trading in New York indicated a 0.01% dip for the Dow Jones, a 0.40% drop for the Standard & Poor’s 500, and a 1.04% fall for the Nasdaq Composite.

FOREX

The dollar edged higher after falling earlier in the day, as traders await Jerome Powell’s speech at Jackson Hole.

The dollar gained 0.03% against a basket of major currencies.

The euro inched up 0.01% to $1.1661.

BONDS

U.S. yields declined ahead of the Jackson Hole symposium.

The yield on ten-year Treasuries fell 2.7 basis points to 4.3121%. The two-year yield dropped 2.1 basis points to 3.7522%.

OIL

Oil prices slipped as investors weighed the implications of ongoing Ukraine negotiations for the energy market. A possible end to the conflict could lead to the lifting of Western sanctions on Russian oil, increasing supply.

Brent crude fell 0.83% to $66.05 a barrel, while U.S. light crude (West Texas Intermediate, WTI) dropped 1.09% to $62.73.

(Written by Mara Vîlcu, edited by Augustin Turpin)

by Mara Vilcu