Staff Report
European stocks opened lower on Thursday as U.S. President Donald Trump reiterated his intent to impose 25% tariffs on imports from the European Union, reigniting trade tensions and rattling investor confidence.
The Stoxx 600 index fell 0.44% by 9:28 a.m. GMT, led by a sharp 3.2% decline in the automobile sector, which has been under pressure due to escalating trade uncertainties. Market sentiment was further dampened by recent data showing a 2.6% year-on-year decline in passenger car sales, reinforcing concerns about weakening demand across the industry.
Among individual stocks, Ferrari shares plummeted nearly 8% after Exor, the Agnelli family’s holding company, announced the sale of approximately 4% of its stake in the luxury automaker. Meanwhile, Rolls-Royce saw its stock soar by 15% after the aerospace and defense giant upgraded its medium-term targets, posted strong revenue and profit growth, and reinstated its shareholder dividend.
British building materials firm Howden Joinery was among the biggest laggards, shedding 6.7% after missing full-year revenue expectations, despite unveiling a £100 million ($126.7 million) share buyback plan.
Trump’s Tariff Warning Heightens Market Uncertainty
Speaking at his first Cabinet meeting of the year, President Trump signaled that 25% tariffs on European imports, including automobiles and other goods, would be announced soon.
“We’ll be announcing it very soon,” Trump stated, emphasizing that the EU has unfairly restricted U.S. exports while enjoying full access to the American market.
“They’ve really taken advantage of us. They don’t accept our cars, they don’t accept, essentially, our farm products. They use all sorts of reasons why not. And we accept everything of them,” he added.
In response, a European Commission spokesperson told CNBC that the EU “will react firmly and immediately against unjustified barriers to free and fair trade,” signaling potential retaliatory measures if tariffs are imposed.
Investors Brace for Key Earnings Reports
Markets were also navigating a busy day for corporate earnings, with major European firms including Daimler Truck, Swiss Re, AXA, Veolia, Metro Bank, WPP, Iberdrola, St. James’s Place, Taylor Wimpey, Man Group, LSEG, Aviva, Telefonica, Teleperformance, Saint-Gobain, and EDP set to release their financial results.
Additionally, investors were closely watching economic data releases, including Spain’s inflation rate, Italy’s business and consumer confidence indicators, and eurozone economic sentiment figures.
Broader European Market Performance
At 8:35 a.m. GMT, European markets remained broadly lower:
- Stoxx 600 index was down 0.6%
- Germany’s DAX dropped over 1%, reversing some of the week’s earlier gains
- France’s CAC 40 fell 0.66%
- UK’s FTSE 100 dipped 0.11%
With trade tensions resurfacing, market volatility is expected to remain elevated as investors assess the potential impact of U.S. tariffs on European economies.
