European stocks continued to drop shortly after the market open today, albeit at a much slower rate than yesterday’s huge losses, as investors around the world continue to reassess their trades in the wake of the Trump administration’s announcement of sweeping global tariffs.
The Stoxx Europe 600 — an index of the largest European companies — slipped 0.9%, while the main indexes in Germany, France and the U.K. also fell less than 1%.
In the Asia-Pacific, Japan’s Nikkei 225 led declines in the region, closing the week down 9% for its sharpest drop in more than five years, according to Reuters. Markets in China, Hong Kong and Taiwan were closed for a holiday.
The banking sector is in European traders’ sights this morning, with a basket of financial stocks down 2.8%. Deutsche Bank, Commerzbank and Barclays all experienced steep drops of as much as 4%.
That’s in part because traders are now expecting lower economic growth following the tariff announcements. That may also lead to interest rate cuts from central banks, which would lower the amount commercial banks can charge customers for holding their money, as well as encourage people to borrow and spend rather than hold their money in banks.
European heavy industry stocks, such as those in companies dealing with oil and gas, chemicals and basic resources, also fell, while U.S. stocks were also expected to open lower after their worst sell-off since the market panic at the start of the coronavirus pandemic in March 2020.
The S&P 500, the Dow Jones Industrial Average and the Nasdaq were all expected to have much shallower opening losses of between 0.3% and 0.6%.
