The STOXX 50 plummeted more than 2% to a two-month low of 5,220 on Thursday, while the broader STOXX 600 tumbled 1.8% to 532, as investors grappled with escalating trade tensions and a flurry of key inflation data releases across the Eurozone.
European shares tumble to two-month lows
The selloff was broad-based, with notable weakness in the basic resources sector, which dropped to its lowest level in six months amid concerns over slowing global demand and increased tariff pressures. Banks, chemicals, and construction materials stocks also faced steep losses as risk sentiment deteriorated.
Market jitters intensified after U.S. President Trump confirmed that the new round of reciprocal tariffs he plans to unveil on Wednesday will apply to all nations, rather than targeting a smaller group of 10 to 15 countries with the largest trade imbalances. This unexpected expansion of trade restrictions rattled investors, fueling fears of a deeper global economic slowdown. Reports also emerged suggesting that Trump has been urging his advisors to take a more aggressive stance on tariffs, raising uncertainty about the future of global trade policies.
Mixed picture for the Eurozone
On the economic front, the latest inflation data presented a mixed picture for the Eurozone. Flash CPI readings showed that Germany’s inflation eased to a four-month low of 2.2% in March, offering some relief to consumers and policymakers. However, inflation in Italy surged to a 1.5-year high of 2.0%, highlighting persistent price pressures in certain parts of the region. The divergence in inflation trends across key Eurozone economies added to market volatility, as investors assessed the potential impact on European Central Bank policy decisions.
For the month of March, the STOXX 50 has now recorded a sharp decline of approximately 6%, while the STOXX 600 has lost 5.5%. The persistent downward trend underscores growing investor unease over the fragile global economic outlook, with concerns about tightening monetary policy, trade disputes, and inflationary pressures weighing heavily on European equities.
