European shares experienced a substantial decline today, marking their steepest loss in eight months. The drop comes amidst rising concerns that an intensifying trade war could hinder economic growth, particularly following the significant tariffs announced by U.S. President Donald Trump.
The CAC in Paris closed down 3.3% at 7,598, while Frankfurt’s DAX dropped 3% to 21,700. London’s FTSE index fell by 1.55% to settle at 8,474. Additionally, Dublin’s ISEQ index saw a decline of over 2%, closing at 10,145.
In the lead-up to what Trump termed “Liberation Day,” fears had already begun to affect European stocks, muddying the optimistic outlook created by Germany’s historic stimulus measures. This shift has left many investors in search of alternatives to the U.S. market.
Notably, luxury goods stocks took a hit, with LVMH plummeting by 5.6% as they faced the brunt of tariffs imposed on the EU and Switzerland. In light of these developments, French President Emmanuel Macron has urged European firms to reconsider their planned investments in the U.S.
Across the Atlantic on Wall Street, significant technology stocks spearheaded a widespread selloff. By 6 PM Irish time, the Nasdaq had plunged 4.86% to 16,745, with the Dow Jones down 2.8% to 41,043, and the S&P 500 decreasing by 3.7% to 5,461. Investors are increasingly turning away from riskier assets, opting instead for the safety of government bonds.
The once-thriving technology sector, credited for driving Wall Street to record highs in recent years, has faced considerable losses. Apple experienced a notable decline of 8.4%, largely impacted by an aggregate tariff of 54% on China—a key manufacturing hub for the company. Other tech giants also struggled, with Nvidia falling 6.2% and Amazon.com slipping 7.4%.
As Sam Stovall, chief investment strategist at CFRA Research, remarked, “The tariff announcement was much more dire than expected, and as a result, stocks are in a free fall, which is due to the anticipated inflationary effects of these tariffs.” He added, “If the Trump administration is not willing to negotiate upfront, we could face retaliatory tariffs that exacerbate the situation.”
Since Trump took office in January, U.S. stocks have struggled, with the S&P 500 and Nasdaq registering a 10% drop from their record highs last month—an indication of correction as investors respond to the potential economic disruption caused by the tariffs. Following the latest announcements, traders are forecasting that the U.S. Federal Reserve may cut interest rates four times this year, commencing with a quarter-point cut in June.
Edited By Ali Musa
Axadle Times International – Monitoring.
