European shares rose on Tuesday, approaching fresh record highs as strong quarterly earnings from HSBC and Bayer helped offset weakness in the consumer sector and persistent geopolitical concerns.

The pan-European STOXX 600 index gained 0.4% in early trading, hovering within reach of the all-time highs set late last week. Germany's DAX and France's CAC 40 each advanced 0.6%, while London's FTSE 100 added 0.5% and Italy's FTSE MIB rose 0.7%. The gains extend a rally that has pushed European benchmarks to record territory this year, supported by the European Central Bank's monetary easing cycle as inflation has moved closer to its 2% target.

Investor sentiment was bolstered by a steady stream of solid corporate results, sustaining momentum from Monday's rally. European equities have remained resilient, with robust corporate balance sheets and easing energy prices continuing to shield regional benchmarks from broader macroeconomic uncertainty. The second-quarter earnings season is being closely watched for signs that corporate profit margins can hold up amid moderating regional economic growth.

Oil prices edged higher on Tuesday following a sharp sell-off in the previous session, triggered when U.S. President Donald Trump announced diplomatic talks with Iran. However, crude's decline was limited after reports indicated that maritime shipping traffic through the critical Strait of Hormuz remained significantly slowed, keeping energy traders cautious about persistent supply bottlenecks along a route that carries roughly a fifth of global oil consumption.

On the corporate front, HSBC slipped 0.4% despite beating second-quarter profit expectations, supported by sustained net interest income and a strong performance in its wealth management division. The bank also announced a fresh $1 billion share buyback, continuing a pattern of capital returns from major European lenders operating with excess capital.

Germany's Bayer delivered a positive surprise, gaining 4.3% after reporting an unexpected 1.9% increase in second-quarter adjusted EBITDA, driven by resilient pharmaceutical sales that offset headwinds in its agricultural business.

Beiersdorf fell 1.1% after the Nivea manufacturer cut its full-year 2026 sales guidance, citing a challenging consumer environment and slowing demand across key international markets. Salvatore Ferragamo dropped 8.5% following its first-half results, underscoring ongoing pressure on European luxury and consumer goods makers facing softer demand in major markets.

Beyond Europe, global trading desks are bracing for high-stakes earnings reports after Wall Street's close from chipmaker AMD and Elon Musk's SpaceX. SpaceX's inaugural results are attracting intense international scrutiny following its historic $85.7 billion IPO in June. Having fallen more than 50% from post-listing peaks amid heavy AI infrastructure spending and volatile cash burn, SpaceX's performance is being viewed as a key barometer for global retail appetite, mega-cap valuation multiples, and the broader technology IPO pipeline.

Source: Investing.com