(Reuters) -European shares climbed on Wednesday, boosted by strong earnings from Europe’s largest software maker SAP, while U.S. President Donald Trump’s backflip from threats to dismiss Federal Reserve Chair Jerome Powell provided relief to investors.
The pan-European STOXX 600 index was up 1.8%, as of 0703 GMT. Other regional indexes – Germany, France, Spain, and the UK – gained between 1.9% and 2.7%.
The markets this week have been grappling with the notion that the Fed’s independence could be under threat after repeated attacks by Trump on Powell for not cutting rates since the president resumed office in January.
Shares of SAP jumped 9.3% after the German company topped analysts’ first-quarter adjusted operating profit expectations. The European technology sector climbed 3.3%, leading sectoral gains.
Also lifting sentiment was Trump’s softer tone on China tariffs, where he told reporters on Tuesday that he would be very nice in negotiations with Beijing.
U.S. Treasury Secretary Scott Bessent said that he believes there will be a de-escalation in U.S.-China trade tensions, but described future negotiations with Beijing as a “slog” that has not started yet.
Shares of Volvo fell 2.2% on Wednesday after the Swedish truck maker reported a bigger-than-expected drop in first-quarter profit and lowered its outlook for the North American truck market.
BP rose 3.8% after activist hedge fund Elliott increased stake in the oil major to just over 5%. Elliott has urged the company to boost its free cash flow to $20 billion by 2027, a source familiar with the situation told Reuters.
On the economic data front, flash PMI surveys out of France, Germany and the euro zone are due for release later in the day.
(Reporting by Sukriti Gupta in Bengaluru; Editing by Sherry Jacob-Phillips)
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