European stocks are anticipated to open with a slight decline on Tuesday as investors process the implications of Donald Trump's inaugural address and the series of executive orders he signed soon after taking office. These orders reversed several significant measures enacted under the Biden administration. Notably, Trump withdrew the United States from the Paris Agreement and the World Health Organization. Additionally, he issued an executive order delaying the prohibition on the short-video platform TikTok by at least 75 days.
In his speech, Trump mentioned the possibility of imposing 25 percent tariffs on Canada and Mexico as soon as February 1, due to concerns regarding illegal immigration at the U.S. border. However, on his first day, Trump refrained from announcing China-specific tariffs, choosing instead to concentrate on global trade practices and the adherence to existing agreements. Asian markets exhibited mixed results, showing a muted response to Trump's inauguration.
The U.S. dollar managed to recover some overnight losses, while gold prices saw a slight increase. Meanwhile, oil prices displayed a mixed trend following Trump's comprehensive restructuring of U.S. energy policy aimed at enhancing domestic oil and gas production.
Among upcoming economic releases, attention may be drawn to the U.K.'s labor market statistics and the ZEW economic sentiment survey outcomes from Germany later in the day.
U.S. stock markets remained closed on Monday in observance of the Martin Luther King Jr. Day holiday. As for European stocks, they closed slightly higher on Monday following reports that the Trump administration would not implement trade tariffs on his first day in office. The pan-European STOXX 600 concluded the day flat, albeit with a positive tilt, after reaching a three-month peak earlier. The German DAX increased by 0.4 percent, France's CAC 40 rose by 0.3 percent, and the U.K.'s FTSE 100 gained 0.2 percent.
