The European market fell sharply on Friday, marking a whips policy on US tariffs, the latest cuts from the European Central Bank, Germany’s fiscal reforms and increased regional defense spending.
region Stoxx 600 The index fell 0.65% at 10:20am in the UK, causing stocks in retail and household goods to fall.
High-end stocks were one of the worst performers Richmont Both Burberry fell by about 5% as the Stoxx Europe Luxury 10 Index fell by 2.3%. The sector is expected to face challenges from rising US import tariffs if it weakens U.S. consumer demand and leads to rising prices.
The STOXX 600 jumped between losses and profits this week amid geopolitical development and corporate revenue development. The benchmark is currently on the course due to weekly losses. This is the first of the year.
US President Donald Trump granted temporary tariff exemptions on around 50% of Mexican imports and 38% of Canadian imports until April 2nd on Thursday. The move is expected to become one of the most affected sectors the day after Trump granted a month’s tariff exemption to automakers. And it came into effect just two days after the new duties were wiped out.
In Europe, market watchers continue to unravel the ECB’s latest quarterly rate cuts, inflation and growth forecasts, and messaging.
The Eurozone central bank said monetary policy is becoming “less limiting in meaning,” suggesting that it could pay more attention to its next meeting after enacting six cuts since June last year. The ECB Staff macroeconomic forecast has raised its headline inflation forecast for 2025 from 2.1% to 2.3%, and downgraded its growth forecast from 0.9% to 1.1% to 0.9%.
“The forecast still has a clear direction, but (ECB) communication is not,” an analyst at Bank of America Global Research said Thursday.
And continuing to shake up the market this week is hopeful of an increase in defence spending across Europe, with Stoxx Aerospace and Defense Index rising by another 9% this week, with the best performance in nearly five years.
The UK held a multilateral talks last week focusing on defense spending and alliance support for Ukraine, but European Union leaders met in Brussels on Thursday to agree to higher defense spending across the bloc despite Hungary’s opposition.
Meanwhile, German stocks have gathered widely for stronger economic growth and hopes of spending on both defense and infrastructure after leading “historic” deals on fiscal reform.
