European markets lower amid lingering trade concerns

The STOXX 50 slipped 0.4% and the STOXX 600 fell 0.3% on Thursday, halting a two-day streak of gains as lingering trade uncertainty and mixed economic signals weighed heavily on investor sentiment.

European markets lower amid lingering trade concerns

The decline came after US Treasury Secretary Scott Bessent cast doubt on the likelihood of a swift resolution to the ongoing trade standoff with China. He remarked that President Trump has not signaled an intention to remove tariffs unilaterally, which dampened optimism that an imminent de-escalation was on the horizon. His comments reignited concerns about the prolonged nature of the trade war and its potential impact on global economic growth. In response, China's Commerce Ministry urged the US to demonstrate sincerity and a genuine willingness to address issues in trade talks if both sides are to resume negotiations. This added to the uncertainty, as markets had been buoyed earlier in the week by hopes of a breakthrough, with some expecting that the two sides might take steps toward de-escalation. However, the conflicting signals coming from both Washington and Beijing highlighted the lack of clear progress, leaving investors uncertain about the path forward.

Market digested a fresh wave of earnings reports

On the corporate front, the market digested a fresh wave of earnings reports, which further influenced investor sentiment. Shares of luxury goods giant Kering plummeted over 4% after the company reported weaker-than-expected Q1 sales and warned of ongoing challenges, particularly in its core markets. The disappointing results pointed to the broader slowdown in consumer spending and the pressure facing high-end brands amid uncertain global economic conditions. Similarly, BNP Paribas saw its shares fall by 2.7% after reporting a predictable decline in first-quarter net profit. While the bank's performance was in line with expectations, it underscored the continued struggles of the financial sector in a low-interest-rate environment. On a more positive note, Adidas gained about 1.8%, bolstered by stronger-than-expected profits in the first quarter. The company’s upbeat results were seen as a reflection of its strong brand positioning and solid demand for its products, particularly in key markets. Similarly, Unilever saw its shares rise by 0.9% after the consumer goods giant reported that its sales had topped analyst estimates, indicating resilience in its core business despite broader economic challenges. Overall, while earnings reports provided mixed signals, the ongoing trade uncertainty and lack of clarity on the global economic outlook overshadowed positive company results. The markets are likely to remain on edge as investors await more concrete developments on trade negotiations and assess the potential implications for corporate earnings in the coming quarters.