European shares slip as investors gauge mixed earnings, US-EU trade progress

European shares retreated on Friday, giving back gains from the previous session, as investors assessed mixed corporate earnings while awaiting updates on EU-U.S. trade discussions ahead of U.S. President Donald Trump's tariff deadline next week.

The pan-European STOXX 600 index was down 0.4% at 549.36 points, as of 0832 GMT. Still, the index remained on course for modest weekly gains.

UK's FTSE 100 dropped 0.4%, pulling back from its all-time peak reached on Thursday. Most regional bourses were also in the red.

Investors navigated a busy week of trade discussions and cheered agreements with Japan, Indonesia and the Philippines, while hopes for a U.S.-EU deal remain as negotiations with the bloc continued.

"The elephant in the room is earnings. You have the sentiment boosted by the news flow on the tariff side," said Roland Kaloyan, head of European Equity Strategy at Societe Generale.

"But we are in the middle of the earnings season, thus, if you have some disappointment coming on that front ... that is not super supportive for the market."

European financials led the sector decline with a 1.3% drop, while stocks linked to basic resources fell 0.6%, pressured by Fresnillo's 2.3% drop. [GOL/]

Among individual stocks, Puma's shares slumped 15.1%, falling the most in the STOXX 600 index, after the German sportswear brand cut its full-year outlook and reported weaker-than-expected quarterly results.

London-listed sports retailer JD Sports fell 1.5%.

Valeo slumped nearly 9% after the French car parts supplier cut its full-year sales outlook.

Traton, a truck unit of German automaker Volkswagen, came under pressure with a 4.4% decline after it slashed its full-year outlook.

On the flip side, Carrefour gained 6% after Europe's biggest food retailer reported its half-year results.

Shares of Volkswagen, Europe's biggest carmaker, were up 2.7% after the CEO said cost cuts must be accelerated in a response to tariffs. Earlier in the session, shares lost 2.4% on the company's revised outlook.

NatWest rose nearly 2% after the British bank posted first-half profit above estimates, and announced it would do a 750-million-pound ($1.01 billion) share buyback.

On the data front, German business morale improved less than expected in July.

Also this week, the European Central Bank held rates steady and gave a cautiously positive view of the economy, dampening expectations for further easing.

Attention next week will turn to key events, including policy decisions from the Federal Reserve and other central banks, earnings from several "Magnificent Seven" companies and Trump's August 1 tariff deadline.

(Reporting by Sanchayaita Roy and Twesha Dikshit in Bengaluru; Editing by Sherry Jacob-Phillips)