European stock markets began the week with a mixed and directionless tone, as investors navigated a complex landscape of new US tariff threats, a high-profile political feud between President Donald Trump and Elon Musk, and significant corporate deal-making.
About 10 minutes into Monday’s trading session, the pan-European Stoxx 600 index was hovering just below the flatline, reflecting a lack of clear consensus among regional sectors.
Major national bourses were also moving in opposite directions: London’s FTSE 100 was down 0.1%, the French CAC 40 was little changed, and Germany’s DAX was managing a gain of 0.4%.
This choppy start was signaled in pre-market futures, which had pointed to a mixed open across the continent.
A key factor driving market caution is a new tariff threat from US President Donald Trump. He has threatened to impose an additional 10% tariff on countries that he deems to be orienting themselves along the “Anti-American policies of BRICS.”
This announcement, which did not elaborate on any specific policies, came as the BRICS group (Brazil, Russia, India, and China) was holding a meeting in Rio de Janeiro, Brazil.
In a joint statement dated July 6, the bloc’s leaders had taken aim at President Trump’s sweeping tariff policies, warning against “unjustified unilateral protectionist measures, including the indiscriminate increase of reciprocal tariffs.”
Corporate moves: Octopus Energy demerger, Capgemini’s $3.3B buyout
In the corporate world, there were several significant developments. The UK’s largest residential gas and electricity supplier, Octopus Energy, is reportedly planning a £10 billion ($13.6 billion) demerger of its technology arm, Kraken, according to a report from Britain’s Sky News over the weekend.
The demerger is reportedly expected to take place within the next 12 months, a move that would separate the high-growth tech business from the core energy supply operations.
Meanwhile, French tech firm Capgemini announced on Monday a major acquisition. It will buy US-listed technology outsourcing firm WNS in a $3.3 billion all-cash deal.
This translates to $76.50 per share, representing a 17% premium on WNS’s July 3 closing price.
Capgemini is aiming to capitalize on WNS’s generative and agentic artificial intelligence offerings, which it said would attract significant future investments.
The Trump-Musk feud escalates: ‘TRAIN WRECK’ vs ‘America Party’
Adding a layer of high-profile political drama to the market narrative, US President Donald Trump has lashed out at Elon Musk following the tech billionaire’s formation of a new political party.
Trump called the move “ridiculous,” and stated that Musk had gone “completely off the rails.”
“I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK over the past five weeks,” Trump said in a post on Truth Social late Sunday US time.
The one thing Third Parties are good for is the creation of complete and total disruption and chaos.
This came after Musk, in a post on X on Saturday, announced he had set up the “American Party” to compete against the Republican and Democratic parties.
Musk had been teasing the idea for weeks, taking on President Trump over his tax and spending plans, which Musk argued would bankrupt the US economy. “By a factor of 2 to 1, you want a new political party and you shall have it!” Musk wrote.
Today, the America Party is formed to give you back your freedom.
This disagreement over the spending bill has led to a dramatic public falling out between Trump and Musk, souring a previous “bromance” that had seen Musk spend millions sponsoring Trump’s re-election bid and the president appointing Musk to lead the Department of Government Efficiency (DOGE), a body tasked with identifying areas to cut federal spending.
“I think it’s ridiculous to start a third party. We have a tremendous success with the Republican Party.
The Democrats have lost their way, but it’s always been a two-party system, and I think starting a third party just adds to confusion,” Trump said on Sunday, as reported by Reuters.
In his Sunday post, Trump also took aim at Musk’s push for an “Electric Vehicle Mandate,” saying it would have “forced everyone to buy an Electric Car in a short period of time.”
The president’s tax and spending cut bill, which was signed into law on July 4, put an end to tax credits for buyers of electric vehicles.
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