European stock indices experienced a significant downturn on Monday following U.S. President Donald Trump’s decision to levy tariffs on Canada, Mexico, and China, coupled with his pledge to extend similar measures to the European Union. This move has heightened fears of a potential trade war, which poses a risk to global economic growth and could adversely affect the earnings of major corporations.
Anticipation now turns to key economic data, including the final eurozone manufacturing PMI for January and initial CPI figures for the region, which are expected later today.
The pan-European STOXX 600 index decreased by 1.2 percent to close at 533.01, retreating from a 0.1 percent gain recorded on Friday. In Germany, the DAX dropped 1.6 percent, while France's CAC 40 fell by 1.4 percent. Despite indications from Trump that the U.K. might escape new tariffs, the FTSE 100 in the U.K. also declined by 1.3 percent.
Concerns over tariffs and the competitive pressures from China negatively impacted the automotive sector, with shares of major manufacturers such as BMW, Mercedes Benz, Volkswagen, and Stellantis declining between 4 to 6 percent.
Technology stocks were likewise hit by widespread losses, with Infineon Technologies falling 3.2 percent and ASML Holding down by 2.5 percent.
Julius Baer saw a sharp decline of more than 10 percent after the Swiss bank revealed plans to reduce its workforce by approximately 5 percent, a strategic initiative led by the new CEO, Stefan Bollinger, as part of cost-saving measures.
Sandoz experienced a 4.6 percent drop following the appointment of Peter Stenico as the new President Region International and a member of the Sandoz Executive Committee.
