European stocks rally at the open as U.S.-Japan trade deal boosts global market sentiment

Nokia shares fall 7% after warning of $94 million tariff hit

Shares of Finnish telecoms giant Nokia were down 7% in early trade on Wednesday, after the company issued a profit warning.

Nokia lowered its comparable operating profit guidance range to 1.6 billion euros to 2.1 billion euros ($1.9 billion to $2.5 billion). It had previously expected the figure to fall in the range of 1.9 billion euros to 2.4 billion euros.

“Since Nokia provided guidance in January for the full year 2025, two headwinds outside its control are impacting the 2025 outlook,” the company said in a late Tuesday statement.

“The largest headwind is currency fluctuations (particularly the weaker USD), an approximately EUR 230 million negative impact ... Also, the current tariff landscape is expected to impact full year operating profit by EUR 50 million to EUR 80 million.”

That represents a tariff hit of around $94 million.

European markets open higher

It's been 10 minutes since the opening bell, and European shares are broadly moving higher.

The pan-European Stoxx 600 was last seen up by 0.9%, with the tariff-sensitive autos sector jumping 3.5%.

That comes after the U.S. signed a bumper trade deal with Japan, and President Donald Trump reportedly told guests at a dinner in Washington Tuesday that EU delegates were “coming in tomorrow, the next day.”

Iberdrola profit slumped in first half

More earnings reports are coming in this morning, on what's set to be a busy day for corporate financial updates.

Iberdrola posted a 14% year-on-year decline in first-half net profit to 3.6 billion euros ($4.2 billion).

The Spanish electricity utilities giant also launched a 5-billion-euro increase in share capital, saying the move would cover its upcoming investment plan.

Equinor's adjusted earnings, meanwhile, fell 13% in the second quarter, in line with expectations, as declining oil prices hit the Norwegian energy group.

The company also booked a $955 million impairment on a key offshore wind project in the U.S., in light of regulatory changes and tariffs.

Strong defense demand boosts Thales profit

French defense contractor Thales raised its full-year sales guidance on Wednesday as it reported stronger-than-expected profit.

The company's adjusted operating profit came in at 1.25 billion euros ($1.47 billion) for the first half of the year, marking a 13% jump from the first six months of 2024.

Analysts had been anticipating the figure to hit 1.23 billion euros, according to LSEG data.

First-half sales saw year-on-year growth of 8.1% to reach 10.3 billion euros, which Thales attributed largely to “a solid performance” in its aerospace and defense divisions.

However, Thales also said on Wednesday that it was still anticipating “a contained direct impact of tariffs” that could be imposed on EU goods by the Trump administration.

The company's guidance, it said, was based on the assumption that 10% reciprocal tariffs would be levied on the EU, with its forecasts excluding any possible retaliatory measures that might be taken by European leaders.

UniCredit lifts profit guidance, leaving Banco BPM bid behind

UniCredit on Wednesday posted a sharp second-quarter profit hike and lifted its full-year guidance, a day after withdrawing its takeover bid for Italian peer Banco BPM amid opposition from Rome.

Italy's second-largest bank reported a 25% year-on-year hike in net profit to 3.3 billion euros ($3.87 billion) in the second quarter when including one-off items, and 2.9 billion euros without them.

Good morning from London, and welcome to CNBC's live blog covering all the action and business news in European financial markets on Wednesday.

Futures data from IG suggest a positive open for European indexes, with London's FTSE 100 seen opening 0.6% higher, France's CAC 40 up 1.2%, Germany's DAX up 1%, and Italy's FTSE MIB 1.2% higher.

European stocks declined again Tuesday as investors digested earnings from some of the largest companies on the continent, and weighed the prospect of U.S. trade tariffs that will kick in on Aug. 1 unless a trade deal is reached.

Overnight, Asia-Pacific markets traded higher after U.S. President Donald Trump announced that he had completed a “massive Deal” with Japan, with a baseline tariff of 15% set on the country's exports to the United States. S&P 500 futures were little changed Tuesday evening after the announcement.

What to keep an eye on Wednesday

Earnings season is ramping up in Europe, with the latest financial reports coming from Equinor, Randstad, Thales, Lonza, Iberdrola, UniCredit, JD Weatherspoon and Moncler.

European data releases include flash consumer confidence figures.