European Stocks Surge as SAP Earnings Impress and Trump Softens Stance

European equities experienced a broad rally on Wednesday, fueled by robust earnings figures from SAP, a leading European software company. Market sentiment was further buoyed as U.S. President Donald Trump appeared to backtrack on previous threats to remove Federal Reserve Chairman Jerome Powell from his position, offering reassurance to investors.

The pan-European STOXX 600 index showed a gain of 1.8% as of 0703 GMT. Major regional indices, including those of Germany, France, Spain, and the UK, also saw significant increases, ranging from 1.9% to 2.7%.

Investor anxiety had been heightened this week by concerns over the Federal Reserve’s independence, particularly after repeated criticisms from Trump regarding Powell’s decision not to lower interest rates since the president’s term began in January.

SAP’s stock price soared by 9.3% following the announcement that the company’s first-quarter adjusted operating profit exceeded analysts’ forecasts.

The technology sector in Europe led the gains, climbing 3.3% overall.

Adding to the positive market atmosphere was a perceived softening in Trump’s rhetoric concerning tariffs on Chinese goods. He indicated to reporters on Tuesday that he intended to be more accommodating during negotiations with Beijing.

U.S. Treasury Secretary Scott Bessent expressed his belief that trade tensions between the U.S. and China would de-escalate, but cautioned that future negotiations with Beijing would be a prolonged process that has not yet commenced.

Conversely, shares of Volvo declined by 2.2% on Wednesday after the Swedish truck manufacturer reported a larger-than-anticipated decrease in first-quarter earnings and revised its outlook downward for the North American truck market.

European shares concluded trading higher, propelled by gains in financials and L’Oreal.

BP’s stock value increased by 3.8% after the activist hedge fund Elliott disclosed an increase in its stake in the oil company to slightly over 5%. Elliott has reportedly urged the company to increase its free cash flow to $20 billion by the year 2027.

On the economic front, flash PMI surveys for France, Germany, and the Eurozone are anticipated to be released later in the day.