European markets lower as investors eye US-China trade developments

Published connected 02/06/2025 - 13:29 GMT+2•Updated 16:43

Almost each awesome European indexes remained successful nan reddish connected Monday day aft China said nan US "severely violated" nan position of their caller waste and acquisition agreement. Market participants besides considered nan effect of US President Donald Trump's scheme to double existent tariffs connected alloy and aluminium from 25% to 50% from this Wednesday.

At nan clip of penning (16:40 CEST), nan EURO STOXX 50 was down 0.43%, Germany's DAX fell 0.47%, while France's CAC 40 declined 0.45%.

“Donald Trump has upset markets erstwhile again,” Russ Mould, finance head astatine AJ Bell, said successful an email statement sent to Euronews.

“Doubling import taxes connected alloy and aluminium, and aggravating China erstwhile again, mean we look a business wherever uncertainty prevails. Trump’s continuous moving of nan extremity posts is frustrating for businesses, governments, consumers and investors.

“Equity markets were down crossed Europe and Asia, pinch futures prices implying a akin shape erstwhile Wall Street opens for trading connected Monday. Unsurprisingly, golden sewage a boost arsenic investors returned to safe-haven assets."

US markets extremity May connected level note

Meanwhile, US markets ended May connected a level note, though for nan period arsenic a full each of nan main indices roseate powerfully pursuing hopes of tariff reconciliations.

"Such optimism will look an contiguous situation arsenic June begins, pinch comments complete nan play keeping nan fierce rhetoric successful place. The latest broadsides from nan White House were chiefly directed astatine China and nan EU, pinch some threatening a consequence successful benignant to immoderate further tariff hikes," Richard Hunter, caput of markets astatine Interactive Investor, said successful an email statement to Euronews.

However, he noted, backmost connected nan ground, location were immoderate promising economical signs pinch nan Federal Reserve’s preferred measurement of inflation, nan Personal Consumption Expenditures scale coming successful little than expected and pinch a user sentiment scale showing higher than had been feared.

"However, specified respite could beryllium short-lived arsenic nan second was mostly predicated connected an evident softening of hostilities betwixt nan US and China successful nan second portion of nan month, which has since evaporated. There will beryllium a further awesome connected nan authorities of nan system astatine nan extremity of nan week, pinch non-farm payrolls expected to show that 130,000 jobs will person been added successful May compared to 177,000 nan erstwhile period and that nan 4.2% unemployment complaint will stay unchanged.

"In nan meantime, US markets person repaired overmuch of nan harm wrought complete nan past fewer months though sentiment remains fragile. The Dow Jones and Nasdaq are down by 0.6% and 1% respectively successful nan year-to-date, while nan 0.5% summation for nan benchmark S&P500 has successful portion been driven by a resurgence of nan mega headdress exertion trade," Hunter said.

Asia markets nether pressure

In summation to contending pinch nan play comments, Asian markets fell foul of geopolitical uncertainty pursuing nan latest Russia-Ukraine developments, pinch nan Hang Seng nether unit based connected nan renewed apt tariff hikes connected aluminium and steel.

"Mainland China was closed for a nationalist holiday, which could time off immoderate losses being stored up ahead of its reopening, apt exacerbated by a study which showed a further contraction successful mill activity complete nan past month," Hunter added.