European Stocks Fall Broadly Amid Global Tariff Uncertainty

Quick overview

European stock markets closed broadly lower on Friday, as investors grew increasingly cautious ahead of the July 9 deadline set by former U.S. President Donald Trump for global trade agreements.

The losses were compounded by the absence of trading in Wall Street due to the U.S. Independence Day holiday.

Just days before the official end of the trade negotiation window, Trump ramped up his rhetoric, stating he would send letters to countries “asking them to start paying to do business in the U.S.”

In that context, Treasury Secretary Scott Bessent announced that a wave of trade deals would be unveiled after July 9, adding that around 100 countries could face tariffs of at least 10%.

Bessent also commented on Europe’s situation, warning that “if the euro hits $1.20, the Europeans will start to complain.”

Red Across Europe

The uncertainty prompted investors to take a more defensive stance, especially since several key trading partners—including the European Union—have yet to finalize any definitive trade deals. As a result, the pan-European STOXX 600 index fell 0.5% on the day.

Basic resources led the sectoral declines, falling 1.4%, as prices of key industrial metals, including copper, came under pressure. Eurozone banks followed with a 1.3% drop, with Spain’s BBVA among the worst performers, losing 2.6%.

The tech sector also weighed on the index, with major names like ASML Holding (-2.6%), SAP (-1%), and STMicroelectronics (-0.9%) trading lower.

On the other hand, pharmaceutical giants Novartis, Roche, and Novo Nordisk—some of the heaviest components of the STOXX 600—posted gains.

Country-by-Country Breakdown

In Germany, the DAX declined 0.6%, further pressured by disappointing industrial goods order data. Similarly, France’s CAC 40 fell 0.8%, dragged down by a sharp drop in May’s industrial production.

Shares of French alcohol producers Pernod Ricard, Remy Cointreau, and LVMH (owner of Hennessy) recovered from session lows after China announced it would exempt major cognac producers from the new tariffs on EU goods, as long as they agree to a minimum price threshold.

Spain’s IBEX 35 posted one of the steepest declines among major European indices, shedding 1.52%. Meanwhile, the UK’s FTSE 100 limited its losses to 0.3%.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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