European Stocks Drop as Trump Reignites Trade War Concerns
European stocks fell as fresh trade war concerns weighed on investor sentiment after President Donald Trump said he would set unilateral tariff rates within two weeks.
The Stoxx Europe 600 Index was trading 0.4% lower by 8:20 a.m. in London. The travel and leisure sector was among the biggest laggards, after US inflation data showed that airfares posted a fourth straight month-on-month decline. Meanwhile, energy shares outperformed.
Among individual stocks, Tesco Plc advanced as much as 2.2% after the UK food retailer’s sales increased more than expected.
The recovery of European stocks stalled in June as ongoing trade negotiations showed little sign of meaningful progress. Commerce Secretary Howard Lutnick said the European Union is likely to be among the last deals that the US completes, as the administration rushes to secure tariff agreements with other trading partners.
“The current level of the market suggests the likely impact of the new US tariffs on growth and inflation has yet to be priced in,” said Benoit Peloille, chief investment officer at Natixis Wealth Management.
Investors will also be watching 30-year Treasury auction later today to gauge the appetite for US debt.
Source: Bloomberg
