IBEX 35 Plunges After Trump’s Criticism, Middle East Tensions

2026-07-08 09:17 By Joana Ferreira 1 min. read

Spain’s IBEX 35 index dropped over 2.5% to 19,095 points on Wednesday after US President Donald Trump criticized Spain as a "terrible partner in NATO," claiming it "doesn’t pay" or participate.

He stated that he does not want anything to do with Spain and urged to cut off all trade, including visits, adding that Spain would come running back to negotiate.

In response, Spain’s government, in a statement to El País, said it aims to maintain a strong relationship with the US and is receiving Trump’s remarks "calmly." The sell-off was also driven by escalating Middle East tensions, which pushed oil prices higher, fueled inflation concerns, and increased bets on European Central Bank rate hikes, darkening the economic outlook.

Brent crude hit two-week highs following renewed US-Iran strikes, with Trump declaring the Iran ceasefire "over." Traders now price in over 30 bps of additional ECB tightening this year, signaling at least one potential rate hike, possibly as early as September.



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IBEX 35 Plunges After Trump’s Criticism, Middle East Tensions
Spain’s IBEX 35 index dropped over 2.5% to 19,095 points on Wednesday after US President Donald Trump criticized Spain as a "terrible partner in NATO," claiming it "doesn’t pay" or participate. He stated that he does not want anything to do with Spain and urged to cut off all trade, including visits, adding that Spain would come running back to negotiate. In response, Spain’s government, in a statement to El País, said it aims to maintain a strong relationship with the US and is receiving Trump’s remarks "calmly." The sell-off was also driven by escalating Middle East tensions, which pushed oil prices higher, fueled inflation concerns, and increased bets on European Central Bank rate hikes, darkening the economic outlook. Brent crude hit two-week highs following renewed US-Iran strikes, with Trump declaring the Iran ceasefire "over." Traders now price in over 30 bps of additional ECB tightening this year, signaling at least one potential rate hike, possibly as early as September.
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