European Stocks Edge Higher on Trump-Zelenskyy Peace Signals

European equities started Tuesday modestly higher after a White House meeting between US President Donald Trump, Ukrainian President Volodymyr Zelenskyy and several European leaders fuelled hopes for eventual peace talks with Russia. Futures pointed to gains of roughly 0.2% for major national benchmarks, and the pan-European Stoxx 600 added about 0.1% shortly after the open. London’s FTSE 100, Frankfurt’s DAX and Paris’s CAC 40 all ticked up, while Milan’s FTSE MIB was little changed. At the Washington talks on Monday, Trump said negotiations to end Russia’s three-and-a-half-year war in Ukraine could commence even as fighting continues, and that European governments would provide Kyiv with security guarantees “in coordination with the US.” Zelenskyy told reporters these guarantees—expected to include a large weapons package—should be formalised within seven to ten days. Trump added that Russian President Vladimir Putin and Zelenskyy are expected to meet within the next fortnight, followed by a three-way summit including the US president. Prospects for de-escalation weighed on defence manufacturers. The Stoxx Europe Aerospace & Defense index fell 1.4%; German tank-parts maker Renk dropped 6.5%, Italy’s Leonardo slid 4.6% and Sweden’s Saab lost 4.2%. Energy prices also eased on speculation a settlement could eventually loosen sanctions on Russian crude. Broader market sentiment remained cautious ahead of the Federal Reserve’s Jackson Hole symposium later this week, with futures pricing in an 83% chance of a quarter-point US rate cut in September.