European markets reverse course to close higher; Autos gain on tariff exemption

European markets ended in the green on Thursday, reversing course as investors digested the latest monetary policy decision from the European Central Bank.

Policymakers at the institution announced a quarter-point cut to the euro zone's key interest rate, bringing it down to 2.5%.

The regional Stoxx 600 index ended around 0.13% higher after spending much of the day in negative territory.

Germany's DAX ended 1.6% higher after notching its best session since November 2022 on Wednesday and hitting a record high earlier on Thursday.

German stocks have been powered by investors betting on stronger growth prospects and significantly higher spending on infrastructure and defense in Europe's biggest economy, after politicians struck a landmark deal to try to reform existing debt restriction rules.

Automakers also received a boost following sharp declines Monday. The Stoxx autos index was up 2.5% after U.S. President Donald Trump on Wednesday announced a one-month tariff exemption for automakers.

Shares of Jeep and Dodge-maker Stellantis, one of the companies set to be most impacted by the duties, rose 1.9%.