The week kicked off amid renewed uncertainty in the United States following the cancellation of part of its tariff program and the announcement of new levies by President Donald Trump, factors that triggered selling in U.S. assets and put pressure on the dollar and Wall Street futures.
On Saturday, Trump announced he would raise the temporary tariff on imports to the U.S. from all countries from 10% to 15%, the maximum allowed by law, after the Supreme Court struck down much of his protectionist barriers.
The European Commission responded by demanding that Washington respect the terms of the trade agreement reached last year.
"A factor of uncertainty that was thought to be resolved has re-emerged. The tariff refunds amount to about 0.5% of GDP, which would push the Fiscal Deficit up to 6.6%. This will weaken U.S. bonds (...) and, by extension, the U.S. stock market," analysts at Bankinter said on their Telegram channel.
On the corporate front, investors are awaiting results from tech giant Nvidia on Wednesday, which will serve as a barometer for the health of artificial intelligence investments. Analysts expect a 71% increase in earnings per share.
"(Nvidia) rarely disappoints, but if it does because the market has become extremely demanding, we would recommend buying on weakness. Semiconductors represent 'the most physical part' of technology and are therefore the most protected in this highly uncertain context," Bankinter noted.
The geopolitical front is also weighing on sentiment, as another round of talks between the United States and Iran is scheduled for Thursday in Geneva, with the risk of U.S. military strikes still looming if no agreement is reached.
On the macro agenda, European Central Bank President Christine Lagarde is set to speak on Monday, and the Ifo business climate index in Germany will be published at 09:00 GMT.
Later in the week, economic confidence indicators for the eurozone (Thursday) and preliminary inflation readings in Spain and Germany (Friday) are due.
At 0802 GMT on Monday, Spain's blue-chip IBEX 35 was up 94.30 points, or 0.52%, at 18,280.30 points, above its previous record closing level (18,186 points on February 20), while the FTSE Eurofirst 300 index of leading European stocks was down 0.20%.
The index has shown strong volatility in recent sessions, though it ended Friday with a 3% weekly gain that took it back above 18,000 points and near all-time highs.
In the banking sector, Santander was up 1.39%, BBVA gained 0.78%, Caixabank advanced 1.09%, Sabadell rose 1.79%, Bankinter climbed 2.02%, and Unicaja Banco added 1.18%.
Among major non-financial stocks, Telefónica gained 0.31%, Inditex slipped 0.31%, Iberdrola rose 0.66%, Cellnex was little changed, and oil company Repsol dropped 0.14%.
Outside the IBEX, Línea Directa jumped more than 6% after publishing its fourth-quarter results.
(Reporting by Tomás Cobos; editing by Jorge Ollero Castela)
