European stocks plummeted today, experiencing their largest single-day decline in eight months amidst concerns that a worsening trade conflict could hinder economic growth, following the introduction of significant tariffs by US President Donald Trump.
The CAC index in Paris fell by 3.3% to close at 7,598, while the DAX in Frankfurt dropped 3% to 21,700, and London’s FTSE index decreased by 1.55% to finish at 8,474.
Dublin’s ISEQ index saw a decline of over 2%, settling at 10,145.
Anticipation leading up to “Liberation Day,” as Trump referred to the day of the tariff announcement, had already pressured European equities after a positive start to the year fueled by hopes surrounding Germany’s historic stimulus measures and investor interest in alternatives to US markets.
Shares of luxury goods companies fell sharply, with LVMH declining by 5.6% due to tariffs impacting the EU and Switzerland.
French President Emmanuel Macron urged European firms to halt planned investments in the US.
On Wall Street, leading technology stocks were at the forefront of a widespread selloff today. By 6 PM Irish time, the Nasdaq had dropped 4.86% to 16,745, while the Dow Jones fell 2.8% to 41,043, and the S&P 500 decreased by 3.7% to 5,461.
Investors abandoned higher-risk assets in favor of the security of government bonds.
The once-flourishing technology stocks, which have helped elevate Wall Street to record levels in recent years, experienced significant setbacks.
Apple plunged 8.4%, shaken by the effects of an aggregate 54% tariff on China, which is a crucial hub for much of the iPhone maker’s production. Nvidia fell by 6.2%, and Amazon.com saw a drop of 7.4%.
“The announcement regarding tariffs was far graver than anticipated, leading to a free fall in stock prices, driven by the expected inflationary repercussions of these tariffs,” stated Sam Stovall, Chief Investment Strategist at CFRA Research.
“If the Trump administration is unwilling to negotiate beforehand, we may face retaliatory tariffs, further complicating and worsening the situation.”
Securities in the US have been on a downturn since Trump assumed office in January, with the S&P 500 and Nasdaq declining by 10% from their record peaks last month, which signals a correction as market participants account for the negative effects of tariffs on the economy and businesses.
Following Trump’s announcements, traders are increasing their projections for the US Federal Reserve to implement four interest rate cuts this year, starting with a 0.25% reduction in June.
