Investors are adopting a cautious stance as they await corporate earnings reports and economic data, leading to a decline in European stocks after a two-day rise. The pan-European STOXX 600 index fell by 0.61% (3.39 points) to close at 548.93 points, while the defense stock index increased by 0.6%, and the automotive sector rose by 0.7%.

All major European indices fell on the 28th, with the German DAX declining by 0.78% (188.30 points) to 24,038.19 points; the UK's FTSE 100 decreased by 0.59% (52.04 points) to 8,726.01 points; and France's CAC 40 fell by 0.49% (38.69 points) to 7,788.10 points. Following Trump's suspension of the 50% tariff on the EU, European stocks had risen for two consecutive days, but they experienced a pullback on the 28th, resulting in an increased sense of caution.

Reports suggest that the EU has requested ASML and other major companies to provide details of their investment plans in the U.S., with European car manufacturers such as Ford and BMW engaged in negotiations with U.S. officials regarding tariff agreements. Additionally, the EU approved the Security Action for Europe (SAFE) tool on the 27th, establishing a €150 billion fund for military procurement, which, coupled with the deteriorating situation between Russia and Ukraine, has led to a persistent rise in defense stocks. German firms Renk and Hensoldt saw increases of 4.6% and 3.9%, respectively, while Sweden’s Saab rose by 2.5%.

On the economic data front, Germany’s unemployment rate rose by 34,000 to 2.96 million in May, exceeding expectations, posing a challenge for the new government attempting to steer the country out of stagnation. The unpredictable trade policies of the Trump administration have created economic risks, leading investors to anticipate a higher probability of a rate cut from the European Central Bank (ECB) next week.

In individual stocks, automotive giant Stellantis appointed North America COO Antonio Filosa as the new CEO, filling a leadership gap that has lasted three months, though its stock price still fell by 2.2%.