On Monday morning, European stocks faced a sharp decline following Donald Trump’s decision to impose large-scale tariffs.
The pan-European STOXX 600 index dropped by more than 5%. The German DAX fell nearly 10% at the start of trading, but later the decline was 6.5%. The French CAC 40 dropped by 5.9%, the British FTSE 100 lost 5% due to falling shares of companies such as Shell, Rolls-Royce, and Barclays, while the Spanish IBEX 35 index fell by 6%.
European defense companies were particularly hard-hit, with their stocks having risen significantly in recent months. At the opening, shares of the German company Rheinmetall crashed by 27%, then dropped by 17%, partially rebounding. Shares of defense giant Thyssenkrupp initially fell by 24%, then decreased by 10%. Shares of Swedish company Saab dropped by 7.3%, and trading in shares of Italian company Leonardo was suspended after a sharp fall.
Amid market turmoil, investors turned to traditional safe-haven assets, resulting in a rise in the value of the euro, Japanese yen, Swiss franc, and government bonds. The decline in European stock markets followed a dramatic downturn in Asia. The Hong Kong Hang Seng index fell by 13%—its worst one-day drop since 1997. The Japanese Nikkei dropped by 8.6%, and the Shanghai Composite index lost 7%.
Futures for American stocks also predicted further deterioration: futures for the S&P 500 index fell by 3.8%, futures for the Dow Jones by 3.3%, and futures for the Nasdaq 100 by 4.2%.
