BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may open on a buoyant note Wednesday as optimism grew over a potential easing of trade tensions between the U.S. and China and U.S. President Donald Trump said he had no intention of firing Federal Reserve Chair Jerome Powell, helping calm investor concerns over the Fed's independence.
Investors may also react favorably to reports suggesting that the White House is nearing general agreements with Japan and India on trade.
Meanwhile, electric vehicle manufacturer missed Wall Street estimates for the ongoing quarter, but CEO Elon Musk said that he would scale back his government role starting in May, sending beaten-down Tesla shares surging in extended trading.
AT&T, Boeing, International Business Machines and Texas Instruments are among the prominent companies due to report their quarterly results later in the day.
Tech giant Intel plans to announce layoffs sometime this week, the Bloomberg reported citing a source.
In economic news, the focus will be on S&P's April flash manufacturing and service activity data along with the Fed's Beige Book, which compiles anecdotal evidence of economic conditions in the 12 Fed districts.
As the global economy enters a new era, traders also await comments from Chicago Fed President Austan Goolsbee, St. Louis Fed President Alberto Musalem and Fed Governor Christopher Waller for further direction.
In Europe, earnings from NatWest and Heathrow Airport as well as the latest purchasing managers' index data on activity in the euro zone's services and manufacturing sectors may garner attention later in the day.
Asian markets were broadly higher, with tech-heavy Hang Seng and Nikkei outperforming regional peers.
The dollar steadied after a rebound and ten-year Treasury bonds gained, while gold continued to ease after hitting a record $3,500 an ounce on Tuesday.
Oil extended overnight gains as new Iran sanctions and industry data showing a drop in U.S. crude oil inventories offset the IMF's warning of reduced global growth in 2026 and beyond because of the trade war.
According to the IMF's latest World Economic Outlook report, the global economy is set to grow 2.8 percent this year and 3.0 percent next year, significantly less than the 3.3 percent expansion that the lender projected for both years in January.
U.S. stocks surged overnight as investors cheered upbeat earnings news from the likes of 3M and GE Aerospace and comments from Treasury Secretary Scott Bessent that the tariff standoff with China cannot be sustained by both sides and there will be de-escalation in the 'very near future'.
At the same time, he suggested any formal agreement may take time. 'If we walked out of negotiations in two or three years with something that looked like that, I'd consider it a huge win.'
Separately, President Trump also expressed openness to negotiation and hinted at a partial reduction in tariffs but warned that the U.S. will set the terms of trade if China refuses to reach a deal.
The Dow and the tech-heavy Nasdaq Composite both rallied 2.7 percent to end higher for the first time in five days while the S&P 500 jumped 2.5 percent.
European stocks recovered from an early slide to end higher on Tuesday after ECB President Christine Lagarde said the disinflation process in the euro area was 'nearing completion.'
The pan European STOXX 600 gained 0.3 percent. The German DAX rose 0.4 percent, while France's CAC 40 and the U.K.'s FTSE 100 both added around 0.6 percent.
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