The STOXX 50 fell 0.6% and the STOXX 600 declined 0.5% on Wednesday, retreating after gains of over 1% in the previous session, as caution returned ahead of President Donald Trump’s upcoming tariff announcement.
European stocks trade lower on Wednesday
Reports suggested that Trump is considering a universal 20% tariff on most imports, though uncertainty remains over the scale, scope, and potential exemptions of the levies, which has left markets on edge. Investors are closely watching the situation, with concerns that new tariffs could escalate trade tensions and disrupt global supply chains.
Most sectors recorded losses on the day, reflecting a broad pullback in risk sentiment, though travel and oil and gas stocks were among the few to post slight gains, with oil prices remaining relatively stable amid ongoing geopolitical uncertainties. The defensive nature of these sectors provided a modicum of support against broader market weakness.
Several major companies under pressure
On the corporate front, several major companies faced pressure. Sanofi dropped 3.1% following disappointing news related to its drug pipeline, while Société Générale and BNP Paribas fell by 3% and 2.7%, respectively, amid concerns over the potential impact of new tariffs on the banking sector's global operations. Bayer also declined by 2.7%, hurt by ongoing litigation and regulatory challenges, while Novo Nordisk slipped 2% despite strong fundamentals in the pharmaceutical sector.
In contrast, some companies managed to outperform in the otherwise risk-off environment. Engie rose by 1.6%, supported by a solid earnings report and its growing clean energy portfolio. Carrefour gained 1.4%, benefiting from positive sentiment around its digital transformation and cost-cutting measures. L'Oreal and Inditex, both stalwarts in the consumer goods sector, saw their stock prices climb by 1% as investors sought stability in these well-established brands.
UniCredit sees a modest decline
Meanwhile, UniCredit saw a modest decline of 1.4% after it announced that Italy’s securities regulator, Consob, had approved its bid to acquire Banco BPM, which lost 1.6% on the news. This move is part of UniCredit's strategy to strengthen its position in the Italian banking sector. Additionally, Crédit Agricole fell 0.5% after receiving authorization from the European Central Bank to exceed the 10% ownership threshold in Banco BPM, raising questions about potential regulatory scrutiny and the strategic direction of these consolidations in the banking industry.
