European stocks closed firmly higher on Tuesday, extending the sharp gains from last session after prospects that the US could pause tariffs for autos and parts supported key sectors of the European economy. The Eurozone's STOXX 50 gained 1.2% and the pan-European STOXX 600 jumped 1.6%. Investor sentiment was buoyed by President Trump's remarks on Monday, indicating he is considering temporary exemptions on tariffs for imported vehicles and parts to give automakers more time to expand US-based production. Besides aiding companies with exposure to the auto sector, the remarks supported hopes that the US President may refrain from passing tariffs without regards to market reactions. Stellantis surged 6.5% while Volkswagen and BMW added 3% each. Also, Santander and UniCredit added over 3% each to set the pace for banks. On the other hand, LVMH sank over 7% after releasing underwhelming revenues for the first quarter.

Source: Trading Economi