Europe close: Stocks tick higher after Supreme Court tariff ruling

20th Feb 2026 17:16

(Sharecast News) - European shares closed higher on Friday as investors digested a landmark ruling from the US Supreme Court striking down president Donald Trump's global tariffs and monitored escalating tensions between Washington and Tehran, while a raft of corporate earnings and upbeat regional data underpinned sentiment.

The pan-European Stoxx 600 rose 0.84% to 630.56.

Germany's DAX gained 0.87% to 25,260.69, France's CAC 40 climbed 1.39% to 8,515.49 and the FTSE 100 advanced 0.56% to 10,686.89.

As Axel Rudolph, chief technical analyst at IG, noted, "European equities moved higher as eurozone private-sector growth strengthened to its fastest pace since November, supported by the sharpest rise in manufacturing output since August 2025 and firmer services activity".

"Negotiated wage growth accelerated in the fourth quarter, while UK retail sales rose at their fastest pace in 20 months, adding to signs of resilience in the European economy."

Markets reacted to the US Supreme Court's 6-3 decision that Trump lacked the authority under the 1977 International Emergency Economic Powers Act to impose sweeping tariffs.

Chief Justice John Roberts wrote that the government's reading of IEEPA would grant the president power to "unilaterally impose unbounded tariffs and change them at will", calling it a "transformative expansion" of executive authority.

He noted that no president had used the statute to impose tariffs in its half-century history.

Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.

Trump described the ruling as a "disgrace".

Rudolph said that "US stocks at first edged lower after data showed the economy grew at its slowest pace since the first quarter of 2025 and core PCE inflation rose more than expected, dampening hopes of a June Fed rate cut".

"A decision by the US Supreme Court to strike down presidential administration 'reciprocal' tariffs, potentially leading to a $175bn refund, helped indices back into the green."

Michael Brown, senior research strategist at Pepperstone, said the IEEPA tariffs accounted for roughly half of the increase in the average effective US tariff rate since Trump returned to office, largely covering 'reciprocal' levies and those targeting China, Canada and Mexico over fentanyl supply.

However, he cautioned that "there are likely enough alternative methods that the admin can employ to ensure that the overall average tariff rate remains little changed, at around 16%, once the dust settles."

ING said the IEEPA measures had generated around $133bn in duties by the end of last year and warned that any refunds would not be automatic, with more than 1,000 corporate entities already pursuing claims through the US Court of International Trade.

Geopolitical risks also remained in focus after Trump said he would decide within 10 days whether to attack Iran, following inconclusive nuclear talks.

A US military build-up in the region pushed Brent crude above $71 a barrel earlier in the week on fears of supply disruption.

Rudolph said concerns over the Iran-US military build-up were "driving the US dollar, oil and precious metal prices higher", adding that oil had climbed to a six-month high while the greenback reached a one-month peak on safe-haven demand.

US GDP growth slows, eurozone PMI tops expectations

US macro data showed growth slowed sharply at the end of 2025, with fourth-quarter GDP rising at an annualised 1.4%, below the 2.5% expected and down from 2.8% growth across 2024.

Full-year growth eased to 2.2%. Inflation remained firm, with core personal consumption expenditures up 3% year-on-year in December and headline PCE at 2.9%.

Both rose 0.4% month-on-month, above forecasts of 0.3%, complicating the Federal Reserve's rate outlook.

Trump blamed weak GDP on the government shutdown and again called for lower interest rates.

In Europe, business surveys painted a more constructive picture.

The Hamburg Commercial Bank flash eurozone composite PMI rose to 51.9 in February from 51.3, marking a 14th consecutive month above the 50 threshold and beating expectations.

Manufacturing returned to growth for only the second time in three and a half years, with the index rising to 50.8 from 49.5.

"It might be premature, but this could be the turning point for the manufacturing sector," said Cyrus de la Rubia, chief economist at HCOB, adding that the sector "is on a more stable footing and could contribute to overall growth this year instead of being a drag for the economy."

In the UK, the S&P Global flash composite output index edged up to 53.9 in February from 53.7, the fastest pace of private-sector growth since April 2024.

Manufacturing output rose to a 17-month high of 53.6, while services activity remained strong at 53.9.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the data signalled "an encouraging start to the year for the UK economy" and was consistent with GDP rising by just over 0.3% in the first quarter if sustained.

However, employment fell for a seventeenth consecutive month.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started off its final trading session of the week in decent fettle, although remained a distance from its recent record highs above 10,700."

Separately, the Office for National Statistics said the UK recorded a £30.4bn budget surplus in January, the highest since records began in 1993 and well above expectations of £24bn, while retail sales rose 1.8% on the month and 4.5% year-on-year, beating forecasts.

ONS chief economist Grant Fitzner said January saw "the highest surplus since monthly records began" as revenues rose strongly and spending was little changed.

Mould said a "resulting move higher in oil prices was helpful for the heavyweight energy stocks on the UK's flagship index, and retailers were also in demand after official retail sales figures for January showed the biggest monthly bounce since May 2024 to a two-year high," adding that "after a tricky period for the UK consumer there was some resilience on show at the start of the year and that, in turn, provided a boost to the unloved retail space."

Moncler jumps on earnings, Anglo American in the greeni

In equities, Moncler surged 13.41% after reporting stronger fourth-quarter sales, while Kingspan gained 7.72% following annual results.

Unipol rose 8.67% after the Italian insurer posted a 36.8% increase in full-year earnings.

Anglo American added 1.09% after reporting adjusted core earnings of $6.4bn for 2025, up from $6.3bn, alongside $1.8bn in cost savings and lower net debt of $8.6bn, though it swung to a $3.7bn net loss on impairments at De Beers.

"What is likely to be the last set of full-year numbers before Anglo American becomes Anglo Teck - barring a last-minute regulatory hitch - revealed a key reason why the deal is being pursued," Mould said.

He added that "while profit from Anglo's copper operations was up, production was down 10%".

"This underlines why a tie-up with Teck might be needed to build out scale in production of the metal," noting that "the unwanted De Beers diamonds operation remains in the dirt with a third write down in value in three years."

On the downside, Siegfried Holding fell 8.78% after issuing a cautious outlook for 2026 and missing revenue expectations.

Reporting by Josh White for Sharecast.com.