Europe’s stock rally stalls amid tariff concerns and profit-taking
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After a strong start to the week that pushed the STOXX 600 to a record high, European markets are set for a rare lower open on Thursday. Futures on the blue-chip STOXX 50 index are down 0.67%, while Germany’s DAX futures are following with a similar decline. The more defensive FTSE futures are showing slightly more resilience, down just 0.22%. The pullback appears to be driven by a mix of factors, including renewed concerns over U.S. trade policy and profit-taking after recent gains.
U.S. President Donald Trump has once again raised the prospect of steep tariffs on European goods, floating a 25% “reciprocal” tariff on European cars and other products. While such proposals have been discussed before, the latest remarks have injected uncertainty into the market. At the same time, Trump signaled that new tariffs on Mexico and Canada could be delayed for another month, underscoring the fluid nature of U.S. trade policy.
In corporate news, London Stock Exchange Group (LSEG) reported an 8.4% increase in annual income for 2024, slightly exceeding analyst expectations. Italian energy giant Eni (ENI) reported a 46% decline in fourth-quarter adjusted net profit, reflecting the challenges facing the energy sector. Meanwhile, Bloomberg News reported that Mercedes-Benz and its subsidiaries are planning to cut up to 15% of their workforce in China, highlighting ongoing difficulties in the world’s largest auto market.
The insurance sector is also in focus, with Swiss Re (SREN) disclosing that claims from the Los Angeles wildfires will amount to less than $700 million, impacting its first-quarter results. French insurer AXA (CS), however, reported better-than-expected full-year earnings, managing to avoid significant losses from recent natural disasters.
Despite today’s pullback, the broader European market remains in a strong position, having benefited from easing inflation concerns and resilient corporate earnings. Investors will be closely watching for further developments on trade policy and economic data releases to gauge whether today’s dip is a temporary pause or the start of a deeper correction.
U.S. President Donald Trump has once again raised the prospect of steep tariffs on European goods, floating a 25% “reciprocal” tariff on European cars and other products. While such proposals have been discussed before, the latest remarks have injected uncertainty into the market. At the same time, Trump signaled that new tariffs on Mexico and Canada could be delayed for another month, underscoring the fluid nature of U.S. trade policy.
In corporate news, London Stock Exchange Group (LSEG) reported an 8.4% increase in annual income for 2024, slightly exceeding analyst expectations. Italian energy giant Eni (ENI) reported a 46% decline in fourth-quarter adjusted net profit, reflecting the challenges facing the energy sector. Meanwhile, Bloomberg News reported that Mercedes-Benz and its subsidiaries are planning to cut up to 15% of their workforce in China, highlighting ongoing difficulties in the world’s largest auto market.
The insurance sector is also in focus, with Swiss Re (SREN) disclosing that claims from the Los Angeles wildfires will amount to less than $700 million, impacting its first-quarter results. French insurer AXA (CS), however, reported better-than-expected full-year earnings, managing to avoid significant losses from recent natural disasters.
Despite today’s pullback, the broader European market remains in a strong position, having benefited from easing inflation concerns and resilient corporate earnings. Investors will be closely watching for further developments on trade policy and economic data releases to gauge whether today’s dip is a temporary pause or the start of a deeper correction.