European stock markets sank on Friday, losing momentum as conflicting signals from President Trump on tariffs left investors feeling uneasy.
The pan-European Stoxx 600 index shed 1 per cent and looked set to halt its run of ten consecutive weekly gains. In London, the FTSE 100 slipped 0.4 per cent and is now down 1.7 per cent over the week, while Germany’s DAX fell 1.5 per cent.
Jamie Constable, market strategist at Singer Capital Markets, observed: “The uncertainty is coming from the White House as trade and other policy flips and flops on a daily basis.”
Trump’s latest about-turns involved granting a last-minute reprieve on tariffs targeting goods from Mexico and Canada, extending exemptions for a further month. On Wednesday, he had already postponed new levies on Mexican and Canadian car imports — changes that unnerved investors and prompted warnings from Republican politicians over potential economic fallout.
On Wall Street, the Nasdaq Composite slid 2.6 per cent and is now in correction territory, having dropped more than 10 per cent from its December peak. Asian markets followed suit, with Japan’s Nikkei 225 losing 2.17 per cent, reaching a six-month low, and Hong Kong’s Hang Seng falling 0.57 per cent.
Heightened risk aversion boosted gold, which rose to $2,922.16 per troy ounce, up 0.4 per cent on the day, and strengthened the Swiss franc. The dollar edged lower, helping to lift sterling to $1.2919 – its highest level since November.
European government bond yields were broadly flat after climbing earlier in the week amid news of potential increased borrowing in Germany to boost infrastructure and defence spending. The 10-year German Bund yield remained at 2.82 per cent, with French yields dipping slightly and UK yields inching higher.
Investors are braced for the latest US employment figures after ADP’s midweek data suggested private sector hiring slowed in February. Markets fear the impact of Trump’s trade policies could be more pronounced than anticipated, possibly dragging on economic growth.
Adding to the tension, Jerome Powell, chair of the US Federal Reserve, is due to speak later, potentially offering fresh insight into the future path of interest rates and broader monetary policy in the world’s largest economy.
Read more:
Trump’s flip-flopping on tariffs rattles european markets