European shares closed higher on Tuesday with defence stocks boosting the market after U.S. President Donald Trump threatened additional sanctions on Russia, while optimism lingered from the delay of U.

Wall Street’s fear gauge settled down after the delay in EU tariffs eased some jitters among traders. The CBOE Volatility Index, or VIX, was down to 19.30 on Tuesday after spiking north of 25 during Friday’s session.

Stock futures are pointing to a sharply higher open for major U.S. indexes on Tuesday as investors react to the latest back-and-forth from the Trump administration on trade.

The European Union is seeking to accelerate trade talks with the US just six weeks before President Donald Trump’s threatened 50% tariffs come into effect.

Stocks climbed on Tuesday after Trump delayed tariffs on the EU. Bond yields edged lower and Nvidia rose ahead of its midweek earnings report.

European Union countries backed plans on Tuesday to scale back the bloc's carbon border levy to cover just 10% of the companies currently covered by the scheme, on the grounds that these firms account for nearly all of the emissions involved.

French President Emmanuel Macron's Vietnam visit and Swedish automaker Volvo Cars' layoffs are both, in some ways, responses to Trump tariffs.