European Shares Likely To Drift Lower On Trade War Fears

(RTTNews) - European stocks may drift lower at open on Tuesday as the U.S.-China tariff battle intensified, threatening key industries and global economic stability.

China has rolled out selective tariffs on U.S. goods in response to the new 10 percent U.S. tariffs on Chinese goods.

While the new U.S. duties on aluminum and steel are unlikely to cause significant disruption, it is feared that upcoming reciprocal tariffs, potentially taking effective on February 11 or 12, could target the pharma, semiconductor chips, and auto industries.

Asian markets held largely steady, though mainland Chinese and Hong Kong stocks traded lower on tariff-related concerns.

U.S. stock futures fell, while the dollar and bullion rallied amid a broader risk-off sentiment prevailing in financial markets.

The U.S. economic calendar remains light, with trading later in the day likely to be impacted by reaction to Fed Chair Jerome Powell's testimony before the Senate Banking Committee.

Oil steadied after the biggest gain in almost four weeks on signs of tighter Russian crude supply.

U.S. stocks shrugged off tariff tensions and inflation-related worries to end on a firm note overnight, led by steelmakers, Nvidia and other AI-related stocks.

In economic news, a survey showed expected inflation rates over the next year and three years ahead were both unchanged in January at 3 percent.

The tech-heavy Nasdaq Composite rallied 1 percent, the S&P 500 added 0.7 percent and the Dow edged up by 0.4 percent.

European markets closed mostly higher on Monday amid optimism about more easing by the European Central Bank.

The pan European STOXX 600 inched up 0.6 percent to reach a record high. The German DAX gained 0.6 percent, France's CAC 40 rose 0.4 percent and the U.K.'s FTSE 100 climbed 0.8 percent.