EUROPEAN EQUITIES UPDATE: Sentiment hit in reaction to Trump tariffs, Energy & Autos slump

STOXX 600: -0.9%

• European bourses opened in the red and have continued to trundle lower, as markets digest the latest tinderbox of uncertainty, which include; Trump tariff updates, poor US ISM data, the US stock market rout and increased EU defence spending.


• On Trump; the President decided to push ahead with tariffs on China, Mexico and Canada; Canada and China both announced their own retaliatory tariffs. President Trump also posted on Truth that the US will put tariffs on crop purchases. Overall, the decisions sparked a considerable sell-off in US equities on Monday.


• The data docket today in Europe has been quiet. More focus has been on EU Commission President von der Leyen who announced a “massive” boost to spending, and is to propose a new instrument to provide EUR 150bln of loans. Given the recent run, defence stocks were little moved on the announcement.

Sectors: Negative

• European sectors hold a strong negative bias, with most of the cyclical industries populating the bottom of the pile, given the risk tone.


• Food, Beverage and Tobacco is buoyed by post-earning upside in Lindt (+5.3%); the Co. beat on its headline metrics and raised its dividend. Utilities takes second spot, and Optimised Personal Care completes the top three.


• Energy and Autos are by far the clear underperformers in today’s session. The former is pressured by considerable losses in oil prices, which took a hit on Monday after OPEC+ confirmed it will proceed with the output hike in April. Autos is pressured as Trump went ahead with the tariffs on Mexico/China, which heightens fears that European autos could be next up, in the President’s sight.

Majors: FTSE 100 -0.5%, DAX 40 -1.6%, CAC 40 -1%

• The FTSE 100 is on the backfoot, with losses to a lesser magnitude vs peers. Intertek (+5.5%) tops the index after reporting strong results; Fresnillo (+1.5%) joins behind after its results were mixed and announced a dividend boost. Outside of the index, Greggs (-11%) sinks as sales continues to slow amid tougher trading conditions. As mentioned in the sectoral breakdown above, energy names such as BP (-4.1%) and Shell (-3.1%) are both on the back foot.


• The DAX 40 is one of the worst performers in Europe today, with sentiment in the Autos sector hit after Trump decided to proceed with tariffs on China, Mexico and Canada – fuelling fears that European autos will be in the President’s crosshairs next. On a stock specific level, Continental (-8%) sinks after reporting mixed results, with its 2025 outlook falling short of expectations. Fresenius Medical Care (-8.3%) also slumps after Fresenius announced its intention to reduce its stake in the company.

US Equity Futures: ES +0.2%, NQ +0.4%, RTY U/C

• Futures are modestly firmer across the board, attempting to pare back some of the hefty losses seen in the prior session which saw the S&P 500 have its worst day this year.


• Traders highlight that the S&P 500 is approaching its 200DMA at 5,723, which has been a strong line of support going back to 2023.


• Recent newsflow suggests that Amazon (U/C) is said to be building its own AI model with reasoning capabilities to compete with Anthropic and OpenAI, according to Business Insider.


• The US Day features the RCM/TIPP Economic Optimism release. Fed's Williams (voter) will speak at a an event hosted by Bloomberg (speaking on February 11th, Williams said that current interest rates are positioned to meet the Fed's 2% inflation target while supporting economic growth, and he sees inflation reaching 2% in the coming years, with unemployment around 4%, and anticipates 2% economic growth in 2025 and 2026).

04 Mar 2025 - 10:25- ForexEU Research- Source: Newsquawk