European shares rise on energy, healthcare boost; tariff uncertainty lingers

European shares ended higher on Tuesday, boosted by healthcare and energy shares while investors assessed the latest phase of U.S. President Donald Trump's tariff rollouts, which included a new deadline for trade deals.

The pan-European STOXX 600 index SXXP ended 0.4% higher, hitting its highest level in three weeks.

Other regional indexes also clocked gains, with Germany's DAX DAX and France's CAC 40 PX1 up about 0.5% each.

German small caps SSDXP also hit an all-time high on Tuesday, powered by a 20% jump in steelmaker Salzgitter SZG after Germany approved for military use the company's Secure 500 steel product.

Heavyweight energy shares (.SXEP) advanced 1.1% on higher crude oil prices, and healthcare (.SXDP) gained 0.8% with Danish drugmaker Novo Nordisk NOVO_B, one of the biggest weights on the STOXX 600, up 2%.

In the latest in the tariff saga, Trump on Monday told 14 nations they would face tariffs ranging from 25% for countries including Japan and South Korea, to 40% for Laos and Myanmar.

However, with the start date pushed back to August 1, it effectively created a three-week window for countries to press for better terms, while prolonging damaging uncertainty about the terms of trade.

"Trump's decision to push the tariff deadline to August 1 may have temporarily soothed market nerves, but the underlying uncertainty remains," said Lukman Otunuga, senior market analyst at FXTM.

"If no meaningful trade deals are reached in the coming weeks, investors could brace for another wave of volatility."

For Europe, EU sources familiar with the matter told Reuters on Monday the bloc will not receive a letter from the United States setting out higher tariffs, and is eyeing possible exemptions from the U.S. baseline levy of 10%.

Countries have been under pressure to seal deals with the U.S. after Trump launched a global trade war in April, which rattled financial markets and prompted policymakers to scramble to protect their economies.

For European equities, the STOXX 600 has rebounded sharply from its April lows and now sits about 3% away from its all-time highs seen in March.

On Monday, Swedish investment company Kinnevik KINV_A climbed to the top of the STOXX 600 with an 8.5% rise after reporting a 2% quarter-to-quarter growth in its second quarter net asset value.

The latest earnings forecasts showed the outlook for European corporate health has deteriorated, with companies expected to report a drop of 0.2% year-on-year in second-quarter earnings, on average, according to LSEG I/B/E/S data.

The European earnings season will kick into gear next week, with the world's biggest supplier of computer chip-making equipment ASML ASML being the first of the heavyweights to report.