By Harshit, LONDON — October 13, 2025 – 8:30 AM EDT
European markets opened the week on a stronger note Monday, led by a sharp rebound in mining and semiconductor stocks, even as traders remained cautious over the escalating trade dispute between the United States and China.
Mining Sector Leads Recovery
The pan-European Stoxx 600 index climbed 0.39% by mid-afternoon, trading at 566.35, as the Basic Materials Index jumped 2.7%, recovering from steep losses on Friday. The rally was driven by major mining players — Fresnillo surged 9.4%, Aurubis rose 3.5%, and Anglo American added over 3% — after U.S. President Donald Trump threatened to impose an additional 100% tariff on Chinese imports in retaliation for Beijing’s newly announced export restrictions on rare earth minerals.
China, which dominates around 70% of global rare earth supply, announced the export curbs late last week, targeting critical materials used in defense, electric vehicles, and semiconductor production. The move immediately heightened concerns over global supply chains, sparking Friday’s market sell-off before Monday’s rebound.
Trump later appeared to soften his stance, posting on Truth Social that trade relations with China “will all be fine,” which helped stabilize investor sentiment.
Major European Indexes in the Green
Across the continent, markets posted modest gains. Germany’s DAX climbed 0.55% to 24,375.28, while Italy’s FTSE MIB advanced 0.29% to 42,167.59. France’s CAC 40 edged 0.21% higher at 7,934.26, and the U.K.’s FTSE 100 added 0.16% to 9,442.87. Spain’s IBEX 35 rose 0.42%.
The recovery in Europe mirrored early optimism in U.S. futures, with Wall Street attempting to bounce back from a $2 trillion equity sell-off last week caused by trade war fears.
Semiconductors and Banking Stocks Show Strength
Semiconductor maker ASML gained 3.4% after the Dutch government took control of Nexperia, a China-owned chipmaker subsidiary, in a move aimed at securing domestic semiconductor supply amid renewed trade tensions. Analysts said the takeover could help strengthen Europe’s position in the global chip race, as geopolitical competition increasingly defines technology access and innovation.
In the banking sector, Lloyds Bank rose 1% after announcing an additional £800 million ($1.07 billion) provision for compensation related to a car finance misselling scandal. The bank’s total provision now stands at £2 billion, as regulators continue investigating improper lending practices in the U.K. auto finance market.
Automakers Mixed as Emissions Scandal Deepens
European auto stocks were mixed. Renault slipped slightly after early gains, while Stellantis rose nearly 3% and Mercedes-Benz added 0.2%. The companies, alongside two other global automakers, are facing a High Court lawsuit in London over allegations that they used “defeat devices” to manipulate diesel emissions test results.
Pharma and Political Developments
Pharmaceutical giant AstraZeneca dropped 0.8% after striking a deal with the U.S. government to lower drug prices in exchange for exemption from new tariffs. The agreement, announced late Friday, is part of a broader White House effort to pressure pharmaceutical companies to cut costs.
In France, newly reappointed Prime Minister Sebastien Lecornu unveiled his cabinet on Monday, naming Roland Lescure as the new finance minister. The government plans to present a revised national budget later in the day, ahead of President Emmanuel Macron’s fiscal deadline.
Global Market Outlook
Asia-Pacific markets traded lower overnight as investors assessed the potential fallout from the revived U.S.–China trade dispute. China’s Ministry of Commerce said Sunday it was “not afraid” of a trade war, accusing Washington of a “textbook double standard.”
Despite the sharp rhetoric, U.S. stocks rebounded on Monday morning after Trump suggested the situation could de-escalate, easing fears of a prolonged conflict that could disrupt global supply chains.
Looking ahead, investors are bracing for a busy week of corporate earnings, with key reports due from ASML, LVMH, and Nestlé as the third-quarter results season kicks off. Market participants will also monitor developments from the IMF and World Bank Annual Meetings in Washington, where finance leaders are expected to discuss the risks of rising trade protectionism and slowing global growth.
