European Stocks Hit Records as 10% Tariff Sparks Rally — Nvidia Holds the Next Move

The Euro Stoxx 50, CAC 40 and FTSE 100 all pushed to fresh intra-day records today. Nvidia reports after the bell tonight with markets looking for the catalyst to break out of range.

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European stock indices surged to fresh all-time highs on Wednesday 25 February after Trump’s worldwide tariff came in at 10 per cent rather than the 15 per cent threatened over the weekend. The Euro Stoxx 50, French CAC 40 and UK’s FTSE 100 all hit intra-day records, while Spain’s IBEX came within points of its Monday high. Asian markets also rallied overnight, with Japan’s Nikkei up 2.2 per cent and South Korea’s Kospi gaining 1.9 per cent — both closing at all-time highs. Investor focus now shifts to Nvidia’s earnings report after tonight’s close, alongside results from Salesforce and Snowflake. Bitcoin rebounded above $66,000, gold held below $5,200 and silver touched $91 per ounce.

Why are European markets hitting all-time highs?

Three tailwinds converged on Wednesday morning. First, Wall Street’s broad-based rebound on Tuesday — with the Russell 2000 up 1.2 per cent and the Nasdaq gaining 1.0 per cent — set a positive tone across Asia and into European opens. Second, Trump’s global tariff landed at 10 per cent, not the 15 per cent maximum he had threatened under Section 122 of the Trade Act of 1974, providing immediate relief to trade-sensitive sectors. Third, a strong set of results from banking giant HSBC added momentum.

The Euro Stoxx 50, French CAC and FTSE 100 all pushed to fresh intra-day records. The Spanish IBEX came within a few points of its own Monday high. Germany’s DAX was the laggard — weighed down by a GfK Consumer Climate survey showing persistent pessimism over the economic outlook.

In his State of the Union address overnight, Trump reiterated his belief that tariffs could eventually replace income tax — a statement that will continue to fuel trade uncertainty. As we reported in our coverage of why Europe structurally struggles to match the speed of US trade policy, the gap between American executive action and European institutional response remains a key vulnerability for the bloc’s exporters.

What is driving the rally in Asia?

Japan’s Nikkei surged 2.2 per cent and South Korea’s Kospi jumped 1.9 per cent, both closing at new all-time highs. Australia’s ASX 200 climbed 1.2 per cent despite a CPI print showing elevated inflation — complicating the Reserve Bank of Australia’s debate on whether further tightening is needed. The Australian dollar strengthened against all majors. Hong Kong’s Hang Seng and the Shanghai Composite each added 0.7 per cent.

The rally was a direct response to Tuesday’s Wall Street rebound, where gains were led by software and cybersecurity stocks staging a relief rally after Anthropic launched new connectors for its Claude Cowork platform. The update eased fears that AI tools would displace existing software providers, pointing instead toward a more collaborative approach. As we examined in our analysis of why 95 per cent of AI pilots fail, the market is learning that AI augmentation — not replacement — is the model that scales.

Why do Nvidia’s earnings matter tonight?

Nvidia reports after the close on Wednesday alongside Salesforce and Snowflake. The stock has rebounded recently, retesting resistance around $195 — highs last seen in November. Tonight’s results will focus on revenues, earnings and forward guidance. In prior quarters, Nvidia has consistently surprised with bullish outlooks, and a repeat could underpin the broader tech rally.

Key metrics to watch include data centre revenue, chip demand, hyperscale cloud spending, competitive dynamics (particularly after Meta’s multibillion-dollar chip deal with AMD), and margin trends. AMD itself closed nearly 9 per cent higher on Tuesday following the Meta announcement.

However, the broader question for US equities remains unresolved. All major indices are rangebound, and the biggest macro uncertainty — the risk of a US–Iran military confrontation — dwarfs any single earnings report. As we reported in our coverage of gold and oil prices swinging on escalating Iran tensions, a third round of Geneva talks this week will determine whether the geopolitical premium currently priced into energy and precious metals holds or evaporates.

What is happening with the dollar and Fed expectations?

The US dollar was mixed on Wednesday, with the Dollar Index recovering Tuesday’s losses but struggling to break above 98.00. Support appears solid above 97.00.

Federal Reserve rhetoric turned notably hawkish. FOMC members Susan Collins and Thomas Barkin both struck a firm tone, while Atlanta Fed President Raphael Bostic — in his final weeks before stepping down — argued that a rate hike, not a cut, may be warranted. He cited the resilience of the US economy despite tariff turmoil, the economic tailwind from AI adoption, and inflation that remains well above the Fed’s 2 per cent target. Bostic warned that inflation could turn higher again — a view that directly challenges current market pricing of roughly 60 basis points of easing over the remainder of 2026.

In Japan, former Bank of Japan Governor Haruhiko Kuroda questioned Prime Minister Sanae Takaichi’s tax and spending plans, arguing that rates should rise to account for increased inflation. The yen weakened across the board.

Where do commodities stand?

Crude oil remains undecided. Front-month WTI briefly broke above $66 last week for the first time since summer 2025, but repeatedly failed to clear $67 — running into long-term resistance dating back to the aftermath of Russia’s invasion of Ukraine. WTI dipped below $66 on Wednesday morning. Oil carries a premium estimated at $7–$10 from US–Iran tensions. A successful outcome from this week’s Geneva talks could deflate that premium rapidly; failure could prove it woefully inadequate. American Petroleum Institute data last night showed a significant build in US crude inventories.

Gold was marginally firmer but failed to reclaim the $5,200 level after rallying to $5,250 on Monday before giving back all gains on Tuesday. Safe-haven demand remains supported by tariff uncertainty and Iran tensions, but a broadly positive equity tone has kept price action choppy rather than directional.

Silver touched $91 per ounce — its highest level in three weeks — before pulling back. The daily MACD continues to curl upward from oversold levels, but silver remains vulnerable at elevated prices. Support is building around $85, with a break below $83 signalling potential for a deeper pullback. As we analysed in our deep dive into silver’s tariff-driven volatility, the metal’s dual identity — half safe haven, half industrial commodity — continues to produce outsized moves in both directions.

What about Bitcoin?

Bitcoin rebounded above $66,000 on Wednesday morning after breaking below $63,000 the previous afternoon. The cryptocurrency is attempting to rally having approached significant support around $60,000 earlier this month. The daily MACD has turned up from oversold levels, but there is little evidence of sustained upside momentum. A break below $62,000 would re-expose the $60,000 psychological level — and potentially trigger panic selling. Conversely, a push above $70,000 would reinvigorate short-term bullishness, though liquidity conditions remain fragile. As we reported in our analysis of why institutional money is exiting crypto markets, the broader capital rotation away from risk assets continues to weigh on digital assets.

Frequently Asked Questions

Why did European stocks hit all-time highs on 25 February 2026?

The Euro Stoxx 50, CAC 40 and FTSE 100 all reached fresh intra-day records after Trump’s global tariff came in at 10 per cent rather than the 15 per cent threatened over the weekend. Wall Street’s broad-based rebound on Tuesday and strong HSBC results added momentum, while Asian markets including the Nikkei and Kospi also closed at all-time highs overnight.

What should investors watch in Nvidia’s earnings tonight?

Key metrics include data centre revenue, chip demand from hyperscale cloud providers, forward guidance, competitive positioning (especially after Meta’s AMD chip deal) and margin trends. Nvidia’s stock has retested resistance at $195. Bullish forward guidance could underpin the broader tech rally, but the US–Iran geopolitical risk remains the dominant macro variable.

Where is the silver price heading in 2026?

Silver touched $91 per ounce on 25 February — its highest in three weeks — but remains volatile at elevated levels. Support is building around $85, with $83 as the key breakdown level. The structural supply deficit (67–120 million ounces forecast for 2026) and rising industrial demand from AI, solar and EVs provide a medium-term floor, but short-term moves continue to be driven by tariff headlines and dollar dynamics.

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