European stocks ended slightly lower on Friday, paring back the robust gains seen in the previous session. This was primarily driven by declines in major banking and consumer cyclical stocks, as markets continued to evaluate the implications of the European economic growth outlook on large corporations. The Eurozone's STOXX 50 index dipped 0.3% to end at 5,940, while the STOXX 600 index fell 0.2% to settle at 607.
Notably, U.S. President Trump's decision to suspend tariff threats against European nations—previously issued due to opposition to the U.S. pursuit of Greenland—provided minimal clarification regarding any new agreements stemming from this abrupt policy shift. Despite this, steady growth figures from the Eurozone's private sector, as indicated by PMI data, supported expectations that the European Central Bank would maintain stable interest rates.
The banking sector saw notable losses, with key players such as Santander, ING, and Nordea all declining by over 1.5%. Conversely, defense-related companies experienced a strong rebound, with Rheinmetall and Safran posting significant gains. Additionally, SAP saw a rise of 4.3% in anticipation of its upcoming earnings report next week.
