(Bloomberg) – European stocks have hit a low following Donald Trump’s tariff announcement, marking the lowest point since January 2024.
Most of the information comes from Bloomberg
The Stoxx Europe 600 index has decreased by 6.5%, continuing its decline after the largest weekly drop since March 2020. It was at 5.6% lower at 5am in London, indicating the same level last seen in early 2024.
Sweden’s OMX Stockholm 30 Index decreased by 6.1% and is steadily approaching bear market territory. The indexes from Italy, France, Switzerland, and Germany entered a correction zone last week.
Defence stocks, among the sectors performing best this year, saw declines as investors raised cash by offloading their gains. Rheinmetall AG dropped 10%, while Hensoldt AG declined by 12%.
All 20 sectors within the Stoxx 600 faced declines, with banks, energy, and insurance stocks recording the most significant losses.
“There’s an overall sense of panic,” stated Daniel Murray, CEO of EFG Asset Management based in Zurich. “Everything has been adversely affected, and even a solid company that has good prospects is struggling.”
The STOXX 600 dropped on Friday, registering its worst weekly losses since the pandemic began, as markets adjusted to fears that the escalating trade war could impact economic growth and reduce consumer spending.
April witnessed a dramatic shift after European stocks rallied in the first quarter due to optimism that German fiscal reforms would spur economic growth. More favorable positioning, attractive valuations, and lower interest rates helped the region achieve a record quarterly performance for the S&P 500.
However, Trump’s tariff announcements turned out to be more drastic than anticipated, prompting a global exit from stocks. The S&P 500 experienced its largest two-day selloff since March 2020, resulting in a market value loss exceeding $5 trillion. The Nasdaq 100 has entered a bear market.
Strategists are increasingly advising investors to steer clear of economically sensitive sectors like energy and instead focus on defensive sectors such as communications and utilities.
Morgan Stanley’s team indicated last week that delays in investment decisions, employment, M&A, and consumer slowdowns will pressure revenues, even if the uncertainty caused by tariffs initially fueled the announcement.
