inflation data, FTSE 100, DAX, CAC 40

European stocks reversed course late in the session on Tuesday to close marginally higher, with the Stoxx 600 index provisionally eking out a 0.01% gain.

Major bourses were all in the green, with Germany’s DAX up 0.64%, France’s CAC 40 up 0.33% and the U.K.’s FTSE 100 up 0.13%.

The euro dropped 0.56% against the U.S. dollar after data showed inflation in the euro zone eased to a cooler-than-forecast 1.9% in May, below the European Central Bank’s 2% target. The figures supported expectations for a 25-basis-point rate cut by the ECB at its meeting on Thursday, with some economists suggesting a follow-up rate cut in June now looks more likely.

Tomorrow we’ll be monitoring talks between European Commissioner for Trade Maros Sefcovic and U.S. Trade Representative Jamieson Greer, who are due to meet in Paris around 9 a.m. local time. It’s also the day U.S. President Donald Trump’s hastily announced hike in duties on steel imports to 50% — expected to fuel domestic inflation and rock the struggling European steel industry — will come into effect.

CNBC will be broadcasting from SuperReturn in Berlin, one of the world’s largest gatherings of the private equity industry, with guests including Carlyle’s Head of Global Credit Mark Jenkins and Bain’s EMEA private equity head Alexander Schmitz. See you then.

— Jenni Reid

Ratings agency S&P Global has made 26 negative ratings actions, including eight downgrades, five CreditWatch negative placements and 13 outlook revisions due to tariffs since the start of March through to the end of May.

Data from S&P published in a report Tuesday showed 24 of the 26 entities were corporations, 18 of which were based in the U.S., including Fender Musical Instruments Corp. — downgraded from stable to negative — and Conair Holdings — downgraded to developing from negative.

Outside of the U.S., Slovakia’s sovereign rating was cut to negative from stable, while China’s Geely Holding, automaker Volvo’s parent company, was also cut to negative from stable.

European firms impacted included Dutch chemicals firm Pearls, and window coverings manufacturer Hunter Douglas Finance.

— Jenni Reid

Fund manager Giles Parkinson of Trinity Bridge sold shares of luxury retailer Moncler in early March and avoided steep losses in the weeks following as the stock slid.

Parkinson’s caution wasn’t borne out of analyst reports, hushed industry whispers, or traditional financial modeling, but from what he called a “good short-term guide to luxury industry writ large”: the spending patterns of international tourists.

His thesis was confirmed when Moncler reported its first quarter 2025 results on April 16. While not disastrous, it painted a clear picture of a company navigating choppier waters.

Read more about how the fund manager arrived at that decision to sell the stock here.

The euro was 0.2% lower against the U.S. dollar and 0.07% down against sterling at 10:42 a.m. in London, after data showed inflation in the euro zone eased to 1.9% from 2.2% in May. The rate was lower than the 2% expected.

Germany’s 10-year bond yield, the benchmark for the euro area, was a little over 2 basis points lower at 2.497%.

European stock markets remained largely in the red, with the regional Stoxx 600 index down 0.2%.

“We expect inflation to fall further in the coming months, leaving the headline rate comfortably below 2% in the second half of the year,” Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics, said in a note.

“This won’t have much of a bearing on Thursday’s ECB decision, which already looked almost certain to be a 25bp cut. But May’s inflation data strengthen the case for another cut at the following meeting in July,”

— Jenni Reid

Sweden’s Finance Minister Elisabeth Svantesson has told CNBC that Washington’s seesawing over global trade and tariffs is worse than levies themselves.

“The most constant right now seems to be the sudden shifts of [U.S. President] Mr. Trump,” she told CNBC’s “Europe Early Edition.”

“He’s changing almost on a daily basis what will happen, and that’s of course really costly for our companies, for our households and for the global economy. So right now, the uncertainty and the unpredictability is worse than tariffs,” she said.

— Holly Ellyatt

Inflation in the 20-member euro zone eased to 1.9% in May, coming in below analyst expectations and also under the European Central Bank’s target of 2%.

The headline decline, assisted by a steep monthly drop in services inflation from 4% in April to 3.2% in May, further builds the case for a widely anticipated interest rate cut from the European Central Bank when it meets on Thursday.

Read more here.

— Ruxandra Iordache

Shares of Starlink competitor Eutelsat rose by more than 6% as the company is reportedly in discussions to raise 1.5 billion euros ($1.7 billion) from investors.

Bloomberg News reported that Eutelsat, which runs the OneWeb satellite constellation, is in talks with the government of France, the United Kingdom, and shipping company CMA CGM to raise funds to build its low-earth orbit network.

The deal would take the French government’s stake in the company to 30% from the current 13.59%, Bloomberg said.

 — Ganesh Rao

The pan-European Stoxx 600 index has turned lower after rising in early trade. The benchmark was lower by 0.2% at 8.30 am in London.

The U.K.’s FTSE 100, CAC 40 and Germany’s DAX were also in the red by 0.1%.

— Ganesh Rao

Swiss bank Julius Baer plans to cut costs by 130 million Swiss Francs ($158.8 million) by 2028 as part of its strategic review.

The bank said that the savings will be in addition to its target to lower expenses by 110 million Swiss Francs ($134 million), which was announced in February. Julius Baer said it expects to exceed that target by 20 million Swiss Francs.

Analysts largely welcomed the strategy update from the bank’s new chief executive, who took control at the start of this year.

“The words discipline/disciplined appear a total of 19 times in the Strategy Update presentation from Julius Baer under new CEO Stefan Bollinger and this is giving the right messaging to all stakeholders given the issues over the past years, in our view,” said JPMorgan’s Amit Ranjan in a note to clients.

The bank also revealed its plans to increase gross profit margins, assets under management and return on its CET reserves.

“While targets appear conservatively struck and imply earnings below consensus, this makes sense but is likely to require evidence of a better outcome and buybacks to resume to see earnings growth and upgrades coming through,” said RBC Capital analyst Anke Reingen.

— Ganesh Rao

Good morning from London and welcome to CNBC’s live blog covering all the action in European financial markets, as well as business news, analysis, earnings and data.

Futures data from IG on Tuesday morning suggests London’s FTSE will open 6 points higher at 8,787, Germany’s DAX 42 points higher at 23,984, France’s CAC 40 up 6 points at 7,741 and Italy’s FTSE MIB up 106 points at 40,073.

The specter of U.S. tariffs has returned to the fore for markets this week, after President Donald Trump said Friday that he will double tariffs on steel imports from 25% to 50% on June 4.

Investors will also be monitoring any developments in trade talks between the U.S. and China, which soured last week. National Economic Council Director Kevin Hassett suggested Sunday that Trump and China’s President Xi Jinping could have a conversation as soon as this week.

— Holly Ellyatt

Investors in Europe will be keeping a close eye on the latest inflation data from the euro zone.

Flash data from the single currency area is expected to show inflation cooled toward 2% in May, paving the way for the European Central Bank to deliver a widely expected 25 basis point rate cut at its next meeting on Thursday.

Euro zone inflation was unchanged at 2.2% in April, missing expectations for a move lower.

— Holly Ellyatt

U.S. stock futures slipped on Tuesday morning after the major averages began June’s trading on a positive note.

In the regular session, the S&P 500 climbed 0.41%. The Nasdaq Composite advanced 0.67%, and the Dow added 35.41 points, or 0.08%.

Stocks ended Monday higher despite rising tensions between China and the United States, with Beijing countering President Donald Trump’s accusations that it had violated a temporary trade agreement. Investors had grown hopeful that the two countries could work out a trade deal, but this latest development points to negotiations taking a turn for the worse.

Meanwhile, Asia-Pacific markets mostly rose overnight after China’s manufacturing activity in May shrank at the fastest pace since September 2022, a private survey showed.

The Caixin/S&P Global manufacturing purchasing managers’ index came in at 48.3, missing Reuters’ median estimate of 50.6 and dropping sharply from 50.4 in April, as a sharper decline in new export orders highlighted the impact of prohibitive U.S. tariffs.

— Holly Ellyatt, Amala Balakrishner and Lisa Kailai Han