Stocks in Europe conclude markedly lower due to the impact of Trump's tariff decision on investor sentiment.
The imposition of U.S. tariffs under President Donald Trump's administration has led to a wave of uncertainty in global markets, causing a downturn in European stock markets and raising concerns about a broader global economic slowdown.
The tariffs, which range from 10 to 41% on various countries including Canada and Switzerland, and a 15% tariff on EU imports, have contributed to significant losses in European shares. The pan-European STOXX600 index dropped by about 1%, with notable losses observed in Germany and Denmark, partly driven by declines in the healthcare sector after political pressure on global pharmaceutical companies to lower drug prices.
The U.S. tariffs have not yet significantly harmed the U.S. economy or inflation, resulting in a comparatively strong U.S. dollar. However, the ripple effects are clear internationally. Sectors such as automotive in regions like South Africa face severe impacts due to U.S. tariffs, threatening jobs and economic stability, illustrating how these trade measures contribute to a global slowdown by disrupting international trade relationships and supply chains.
In the UK, the FTSE 100 ended 0.7% down, while the HCOB Germany Manufacturing PMI was revised slightly lower to 49.1, indicating a deterioration in manufacturing business conditions. The S&P Global UK Manufacturing PMI rose slightly to 48, indicating a mildest decline in business conditions since January, but this was overshadowed by the softest contraction in output in nine months.
Meanwhile, in the European markets, many countries ended notably lower, including Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain, and Sweden. AXA's first-half profit came in below estimates, causing the company to end lower by nearly 8%, while Intertek Group's stock fell 6.7% due to forex headwinds overshadowing the company's solid first-half performance.
On the positive side, Orange gained more than 3.5% in the market, and Danone advanced by about 0.85%. Bayer's 2025 sales forecast was raised, leading to a 3% increase in the company's stock, and Sanofi climbed nearly 2% in the market.
Eurozone inflation remained stable at the European Central Bank's 2% target in July, with the harmonized index of consumer prices increasing 2% year-on-year, and core inflation that excludes prices of energy, food, alcohol and tobacco also remaining stable at 2.3%.
However, the uncertainty and disruptions caused by U.S. tariffs continue to cast a shadow over the global economic outlook. The trade tensions have increased uncertainty in global markets, affecting investor confidence and market stability, and the impact on jobs and economic stability in various regions cannot be ignored.
- The trade tensions instigated by U.S. tariffs under President Donald Trump's administration have led to a wave of uncertainty in global business, causing a downturn in numerous European stock markets, raising concerns about a broader global economic slowdown.
- Investors are closely watching the global news, as the impacts of these tariffs have disrupted international trade relationships and supply chains, particularly affecting sectors such as automotive in regions like South Africa, threatening jobs and economic stability.
- In the realm of finance, many European companies have experienced significant losses due to U.S. tariffs, as observed in the case of AXA and Intertek Group, while the overall stock market dynamics also reveal a picture of instability, with indices like STOXX600, FTSE 100, and HCOB Germany Manufacturing PMI exhibiting declines or revised lower values.
