Major European stock markets declined on Thursday, with the STOXX 50 falling 0.8% and the broader STOXX 600 slipping 0.3%, as investors reacted to the European Central Bank’s decision to cut interest rates by 25 basis points to 2.25%.
European stocks hold onto losses after ECB cut
While the rate cut was widely anticipated, the ECB’s move underscores persistent concerns over sluggish growth and softening inflation across the Euro Area. Notably, the central bank dropped the term “restrictive” from its policy statement, fueling speculation that further monetary easing could be on the table if economic conditions deteriorate further.
The market mood was also clouded by ongoing global trade uncertainty, particularly stemming from heightened US tariff threats that continue to weigh on business sentiment and investor risk appetite in Europe. Still, a modest boost to sentiment came from President Trump’s remarks indicating “big progress” in trade talks with Japan, sparking cautious optimism about broader multilateral negotiations.
Earnings remained in sharp focus
In corporate news, earnings remained in sharp focus. Shares of French luxury giant Hermès dropped over 3% after the company reported first-quarter sales that fell short of expectations, raising questions about consumer demand resilience amid softer global growth. In contrast, Siemens Energy surged nearly 13% after delivering strong quarterly results and upgrading its outlook for 2025, citing robust demand in its power and renewables divisions.
Investors are now looking ahead to more earnings releases and key inflation data from both sides of the Atlantic to gauge the durability of the recent market rally and the likely trajectory of monetary policy.
