FX.co ★ European Stocks Decline but Still on Track for Strong Q1

European stocks commenced the week in the red, with the STOXX 50 and STOXX 600 indices each declining by approximately 1%, reaching close to two-month lows. This downturn is attributed to persistent concerns over the unresolved trade war, which continue to dampen investor confidence. The introduction of new reciprocal tariffs on U.S. imports, scheduled for Wednesday, has added to the uncertainty over their extent and potential repercussions. Reports suggest that President Trump has recently encouraged his advisors to take a more assertive approach regarding tariffs. Notably, the basic resources sector experienced significant losses, plunging to its lowest point since September. Furthermore, sectors such as banking, chemicals, and construction materials also faced notable declines. Despite a roughly 2.4% decline for the STOXX 50 in March, the index remains poised to finish the first quarter with an approximate 9% gain. Similarly, the STOXX 600 has dipped by 2.7% this month but retains an overall increase of about 7% for the quarter, making it the strongest quarterly performance since late 2022.