European Stocks Face Further Pressure

European stock indices closed firmly lower on Wednesday amid persistent concerns of pro-inflationary pressures and fresh threats of tarrifs from the US. The Euro STOXX 50 fell 0.7% to 6,065 and the STOXX Europe 600 fell 0.5% to 622. The US Presidential administration threatened additional tariffs of up to 12.5% on multiple trading partners due to their failure to ban goods made from forced labor, reigniting trade barreirs with the EU. Meanwhile, fresh strikes between Iran and GCC countries further deteriorated the ongoing ceasefire, lifting oil prices and Eurozone yields. Banks closed sharply lower with UniCredit, BBVA, and Deutsche Bank, dropping between 3.7% and 2%. Luxury brands were also under pressure with LVMH slipping 3%. In turn, ASML added 1.6% to track the positive momentum for the chip sector. Lastly, Inditex added 1.5% after posting robust earnings results.

European stocks traded lower on Wednesday, with the STOXX 50 declining 0.4% and the STOXX 600 slipping 0.2%, as rising oil prices and renewed uncertainty in the Middle East weighed on investor sentiment. Concerns were also fueled by fresh tariffs announced by President Trump. The Office of the US Trade Representative has proposed additional tariffs of up to 12.5% on 60 trading partners over their alleged failure to prohibit goods produced with forced labor, including the EU, China, and Japan. Energy price-sensitive airlines came under pressure, with Lufthansa and Air France both falling around 1%. Automakers were also lower, including Mercedes-Benz (-2.1%), and BMW (-2.4%). In addition, the banking sector came under pressure, with stocks falling for HSBC Holdings (-1.2%), BBVA (-1%) and Intesa Sanpaolo (-0.9%). In contrast, retail stocks outperformed, led by Inditex, whose shares jumped 4.6% after the company reported a 5.4% increase in Q1 profit.

European equity markets were poised for a lower open on Wednesday, giving back some of the previous session’s gains, as investors assessed proposed US plans to impose broad new tariffs. The US Trade Representative proposed tariffs of up to 12.5% on 60 trading partners, including the European Union, over alleged failures to ban goods made with forced labor. Investors also continued to track developments in the US–Iran conflict after tensions flared overnight, with Washington alleging that Tehran carried out fresh attacks despite a ceasefire still being in effect. On the data front, economic releases today include PMIs across the region, Russia’s unemployment and business confidence readings, EU PPI figures, and Austria’s GDP data. In premarket trading, Euro Stoxx 50 futures and Stoxx 600 futures were both down 0.3%.