- European stocks fell broadly on renewed U.S. tariff threats.
- Luxury and wine companies like LVMH and Remy Cointreau were hit hardest.
- Investors eye currency movements and upcoming Davos speeches for guidance.
European markets opened sharply lower on Tuesday as investors reacted to fresh threats of U.S. trade tariffs targeting several major European economies. The pan-European Stoxx 600 dropped 1.4% by mid-morning, with all sectors in negative territory, signaling widespread investor caution.
Key Indexes Take a Hit
Leading benchmarks across the continent recorded significant declines: France’s CAC 40 fell 1.27% to 8,009.38, Germany’s DAX dropped 1.53% to 24,576.40, and the U.K.’s FTSE 100 slid 1.23% to 10,069.56. Italy’s FTSE MIB and Spain’s IBEX 35 fell 1.42% and 1.60%, respectively. Analysts attributed the sell-off to fears over escalating trade tensions and the potential impact on corporate earnings.
Luxury and Wine Sectors Targeted
The threat of tariffs hit European luxury and beverage stocks particularly hard. LVMH, the French luxury conglomerate, fell 2.1%, while Remy Cointreau, known for its champagne brands, declined 1.5%. Reports indicate that President Trump is considering a 200% tariff on French wine and champagne in response to diplomatic tensions over the Middle East, adding further pressure to high-profile European exporters.
Currency Movements and U.K. Labor Data
Despite equity market declines, the euro strengthened 0.7% against the U.S. dollar, trading at $1.1725, and rose 0.35% against the pound. Sterling also gained 0.36% versus the dollar, reaching $1.3471. Meanwhile, U.K. employment figures showed the unemployment rate steady at 5.1% through November, while wage growth slowed to 4.5%, reflecting a moderate labor market backdrop.
European officials have denounced the U.S. tariff threats as “unacceptable,” with France advocating for the EU to deploy its Anti-Coercion Instrument — the bloc’s strongest economic countermeasure. Markets will also watch closely the World Economic Forum in Davos, where high-profile speeches, including by President Trump on Wednesday, could influence investor sentiment and trade diplomacy.
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The European stock market sell-off on Tuesday underscores the fragility of investor confidence amid geopolitical tensions. As trade threats mount and luxury exports face potential tariffs, markets remain on edge, awaiting diplomatic signals from both sides of the Atlantic.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. CoinBrief.io is not responsible for any financial losses.
