European shares steady as investors assess Mideast progress; automakers slide

May 4 (Reuters) - European shares were muted on Monday, as investors watched for signs of progress in Middle East talks, while European automakers were under pressure following a potential U.S. tariff hike.

U.S. President Donald Trump said on Friday he would raise tariffs on cars and trucks from the European Union to 25% this week from the prior 15%, saying the bloc had not complied with its trade deal.

German automakers led the fall, with BMW and Mercedes dropping over 2% each, while Porsche and Volkswagen were off 1.5% each.

Truckmakers Daimler Truck and Traton were both marginally down. The automobiles index fell 1.6%.

The pan-European STOXX 600 was flat at 611.98 points as of 0704 GMT, after posting a modest gain last week. Most regional bourses were muted with Germany's DAX little changed. London markets were closed for a public holiday.

European equities still remain about 4% away from their pre-war trading levels, while Wall Street and global equities have rebounded on Artificial Intelligence-driven optimism, with the region's energy dependence weighing on shares.

Among early movers, Thyssenkrupp gained 1.2%. The German industrial giant paused talks to sell its steel unit to India's Jindal Steel.

(Reporting by Twesha Dikshit; Editing by Nivedita Bhattacharjee )

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This story was originally published May 4, 2026 at 3:20 AM.