Major European stock markets closed lower on Thursday, with both the STOXX 50 and the STOXX 600 dropping nearly 1%, driven by significant losses in the auto sector.
European markets lower on Trump’s auto tariffs
The decline came after the Trump administration announced a new 25% tariff on “all cars that are not made in the United States,” set to take effect on April 2. This move has sparked fears of a renewed trade conflict, particularly as President Trump threatened to impose even “far larger” tariffs on the European Union and Canada if they cooperate to challenge U.S. trade tariffs. The announcement caused widespread concerns over the impact on European automakers, leading to a sharp downturn in the sector.
Automotive stocks plummet
The autos and parts index plummeted by approximately 3%, reaching its lowest point since early December, as investors reacted to the heightened trade tensions. Shares of major car manufacturers took a hit, with Porsche and Mercedes-Benz both falling 5.4%, BMW dropping 4.3%, and Volkswagen seeing a 3.7% decline. Daimler Truck Holding was also down by 2.5%. In particular, shares of Volvo Cars plunged by 5.6%, hitting a record low, while Stellantis saw a loss of about 5%. These steep declines reflect investor concerns over potential disruptions to the global supply chain and reduced profitability in the auto sector if the tariffs are enacted.
Tech and chips shares also under pressure
Tech and semiconductor stocks were also under pressure amid the broader market downturn. ASML Holding, a key player in the semiconductor industry, saw its stock fall by 1.2%, while STMicroelectronics dropped 2.2% and Infineon lost 2.8%. Dassault Systemes, a software company with significant exposure to the tech industry, sank 3.8%, adding to the negative sentiment across the technology sector. These losses reflect broader concerns over global trade tensions, as well as potential supply chain disruptions that could affect the technology sector's performance in the coming months.
