European markets head for higher open as traders assess U.S.-China dispute

LONDON — European stocks are expected to open higher on Wednesday, rebounding after touching a two-week low in the previous trading session.

The U.K.'s FTSE index is seen opening 0.37% higher, Germany's DAX up 0.4%, France's CAC 40 1.72% higher and Italy's FTSE MIB 0.6% higher, according to data from IG.

The positive change in sentiment comes after regional stocks touched on two-week lows on Tuesday, amid the threat of a new trade dispute between the U.S. and China.

U.S. President Donald Trump threatened China last Friday with a fresh wave of tariff increases to "financially counter" new export controls that China imposed on rare earth minerals.

Then on Tuesday he criticized China for not buying soybeans, calling it an "an economically hostile act." He also threatened "retribution" such as a cooking oil embargo.

Asia-Pacific markets traded higher overnight, while U.S. stock futures were little changed following a volatile session for stocks.

France will be watched closely Wednesday after French Prime Minister Sebastien Lecornu promised on Tuesday to suspend a controversial pension reform until after the 2027 election, one of the key achievements of President Emmanuel Macron.

The suspension of the reform was welcomed by the Socialists, who said they would support Lecornu's government when confidence votes, called by opposition parties, are held on Thursday.

Investors will also be watching for news from the IMF and World Bank annual meetings in Washington.

The meetings bring together central bankers, ministers of finance and development, the private sector, civil society and academia to discuss issues of global concern, including the global economy, poverty eradication and economic development.