This was CNBC's live blog covering European markets.

European markets closed higher on Monday afternoon, having fallen from earlier highs after U.S. President-elect Donald Trump dismissed a media report that his tariff plan may not be as extreme as feared.

The regional Stoxx 600 index ended up 0.94%, as the autos sector lost some momentum, closing 3% higher from an earlier gain of nearly 5%.

The Washington Post on Monday reported that Trump's team is considering a plan to impose tariffs on all countries, but only on "critical imports." What might be covered was not specified in the story, but Germany's Daimler Truck and Italian-American Stellantis — firms with key U.S. markets — both traded around 4.5% higher.

However, Trump posted on his social network later Monday: "The story in the Washington Post, quoting so-called anonymous sources, which don't exist, incorrectly states that my tariff policy will be pared back. That is wrong. The Washington Post knows it's wrong. It's just another example of Fake News."

A spokesperson for The Washington Post confirmed that the publication "stands by its reporting" when contacted by CNBC.

Dutch chip firms remained among the top performers Monday, with ASML closing up 8.7%, ASM International up 6.2% and BE Semiconductor Industries up 5.4%. Closely watched chipmaker Taiwan Semiconductor Manufacturing Co. also saw a strong performance in Asia trade, with Taiwan-listed shares rising 4.65% to close at an all-time high.

The moves come after Taiwanese electronics giant Foxconn — whose customers include Apple and Nvidia — on Sunday reported record fourth-quarter revenue, sending shares almost 2% higher Monday.

On the data front in Europe, German inflation rose to a higher-than-expected 2.9% in December, statistics office Destatis said. Analysts polled by Reuters expected a 2.6% reading.

The hot inflation print along with the tariff report helped drive the euro 0.83% higher against the U.S. dollar to $1.039. Sterling meanwhile traded 0.81% higher against the greenback.

Overnight, Asia-Pacific markets were mixed on Monday as investors assessed business activity data from China and Hong Kong.

U.S. stocks traded higher as investors looked ahead to the December jobs report on Friday; the data will be one of the last key pieces of data before the Federal Reserve's meeting at the end of the month.

Investors stateside will also watching the Job Openings and Labor Turnover Survey Tuesday and December ADP Employment Survey Wednesday.

The U.S. trading week will be shorter this week, with the New York Stock Exchange closed Thursday to mark the death of former President Jimmy Carter.

— CNBC's Tanaya Macheel contributed to this market summary

U.S. stocks rebound at the open

U.S. stocks opened higher Monday, rebounding after a down week as chipmakers and technology gained on a positive earnings report from Foxconn.

The tech-heavy Nasdaq Composite climbed 1.36% in early deals, while the S&P 500 added 0.83%. The Dow Jones Industrial Average also ticked up 0.3%.

— Karen Gilchrist

Cognac makers higher after Macron says PM to visit China to ease trade dispute

Shares of cognac producers, including LVMH, Pernod Ricard and Remy Cointreau, were higher after French President Emmanuel Macron said his country would hold talks in China over hefty brandy tariffs introduced in October last year.

According to Reuters, Macron said during a conference Monday that newly-appointed French Prime Minister Francois Bayrou would visit China to make progress on the issue. No date was provided.

Though denied by China, EU officials alleged the brandy tariffs were retaliation for the European Union's imposition of duties on Chinese electric vehicles.

China has long been a major market for French cognac, a variety of brandy.

— Jenni Reid

German inflation rises more than expected to 2.9% in December

German inflation jumped to a higher-than-expected 2.9% in December, German statistics office Destatis said in the first reading since the country's government was dissolved late last month.

The preliminary Monday print of the country's consumer price index is harmonized across the euro area for comparability. It compares with a 2.6% forecast from analysts polled by Reuters.

December marked the third consecutive month in which German inflation was back above the European Central Bank's 2% target. The indicator fell to 1.8% in September, then jumped back to 2.4% in October and was unchanged at that level in November.

Read more here.

— Sophie Kiderlin

U.S. dollar slides on Washington Post report on Trump tariffs

The euro and sterling both traded around 0.9% higher against the U.S. dollar as global markets reacted to a Washington Post report suggesting U.S. President-elect Donald Trump's universal trade tariffs may only target "critical imports" related to national or economic security.

The dollar — which has soared in recent months as the Federal Reserve was seen exercising caution in cuttting interest rates due to the potential inflationary impact of Trump tariffs — fell 0.88% against a basket of major currencies.

"It is not quite clear what 'critical imports' refer to just yet. However, it looks as if officials are already preparing to water down the worst of Trump's campaign promises by narrowing the scope of the tariffs," Kyle Chapman, FX markets analyst at Ballinger Group, said in emailed comments.

"That means a lower footprint on global trade, a smaller impact on U.S. inflation, less restriction on the Fed's cutting cycle, and a smaller negative growth shock for the global economy versus what the market had been preparing for."

The report is a "clear indication" that the extreme proposal for a 10-20% universal tariff on all imports is unlikely to materalize and "significantly reduces the probability" that the euro falls back to parity with the dollar, Chapman added.

— Jenni Reid

European macro outlook to remain sluggish in 2025, Abrdn says

Ben Ritchie, head of developed markets equities at Abrdn, weighs in on Europe's macroeconomic outlook and the implications for the stock market.

Stocks on the move: Neste, ASML higher

Finnish fuel producer Neste led mid-morning gains on the Stoxx 600 index, continuing positive momentum from last week after the company secured its biggest ever sustainable aviation fuel supply contract.

Chip firms were also broadly higher, with ASML and ASM International both up by around 4.5%. Global chip firms — including Taiwanese chipmaker TSMC — were buoyed after Apple and Nvidia supplier Foxconn beat expectations to post record revenue in the fourth quarter.

— Jenni Reid

Novo Nordisk shares slip 1.8% after target price cuts

Ozempic-maker Novo Nordisk was down 1.8% in early morning deals after analysts cut target prices on the stock.

Berenberg cut its target price to 725 Danish krone ($100.52) from 975 Krone, while Jefferies cut its target price to 515 Krone from 575 Krone.

Europe's most valuable company plunged 20% on Dec. 20 after results in a late-stage trial for its experimental CagriSema weight loss drug missed expectations.

— Jenni Reid

Europe stocks open higher

European stock markets opened broadly higher Monday, with the Stoxx 600 index up 0.29% at 8:15 a.m. in London.

France's CAC 40 index jumped 0.77% as Germany's DAX gained 0.4%. The U.K.'s FTSE 100 bucked the trend to dip 0.1%.

— Jenni Reid

Survey finds British business confidence at lowest level since 2022 ‘mini-budget’

Confidence among British firms has tumbled to its lowest level since the market-rocking "mini-budget" crisis in fall 2022, according to a survey by the British Chambers of Commerce.

The trade group said sentiment had "declined significantly" in its largest poll since the Labour government's debut budget last October, which included a hike in the amount many employers pay out in National Insurance (NI), a tax on earnings. 

The BCC said 63% of businesses cited tax as a worry in the survey, up from 48% in the third quarter. Concern about inflation and interest rates remained roughly steady.

The percentage of companies saying they expected turnover to increase in the next twelve months fell to 49%, from 56%

"Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging. Businesses are already cutting back on investment and say they will have to put up prices in the coming months," said Shevaun Haviland, the BCC's director general.

"The government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won't help businesses struggling now." 

The Labour Party argues tax rises were necessary to plug a shortfall in the public finances left by the previous administration. It has also previously stated that more than half of U.K. employers will either experience a cut or no change in their national insurance bills due to exemptions.

— Jenni Reid

Volkswagen extends Xpeng partnership with China EV charging network

Germany's Volkswagen and China's Xpeng Motors announced Monday they would expand their partnership to share electric vehicle charging piles, creating "one of the largest super-fast charging networks in China."

The automakers said they had a combined 20,000 charging stations across 420 cities in China which would be available to their respective customers.

They said they would also look into the possibility of building co-branded super-fast charging stations in the country.

Volkswagen — which is facing myriad problems, including tepid European demand for passenger vehicles — has partnered with EV manufacturer Xpeng since 2023 on the joint development of electric cars for delivery in China.

Automakers broadly are struggling with cost competitiveness in the EV space, which is expected to drive industry consolidation such as the proposed Honda-Nissan merger.

— Jenni Reid

Crypto under pressure after bitcoin and ether post best weeks since Dec. 6

Bitcoin and ether are coming off their best weeks since Dec. 6, after they turned in their first positive weeks in four on Friday. They each gained about 4% for the week. On Sunday night they were lower by less than 1% each, according to Coin Metrics.

Solana had its best week since November 22nd, notching a more than 4% weekly gain. It traded lower by 1.25% Sunday night.

— Tanaya Macheel, Gina Francolla

CNBC Pro: From EVs to beauty: Strategist names four stocks to buy in 2025

The outlook for equity markets this year looks uncertain, with one market strategist describing the new year as "stepping into a house of cards."

"The stock market may fluctuate in 2025, but significant opportunities will arise for those focused on individual stock picks," Michele Schneider, chief market strategist at Marketgauge.com, said.

From beauty labels to electric vehicle companies, here are four stocks Schneider expects to beat the market this year.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

European markets: Here are the opening calls

European markets are expected to open mostly higher Monday.

The U.K.'s FTSE 100 index is expected to open 4 points lower at 8,220, Germany's DAX up 50 points at 19,953, France's CAC up 22 points at 7,296 and Italy's FTSE MIB up 113 points at 34,308, according to data from IG.

There are no key earnings or data releases Monday.

— Holly Ellyatt