- European stock market decline was driven by U.S. tariff threats on Greenland opposition.
- Automakers and luxury goods sectors faced the largest losses.
- Defense and tech stocks, along with gold, showed resilience.
European stocks fell sharply on Monday after U.S. President Donald Trump warned that tariffs on European countries could rise if they oppose his plan to buy Greenland. The Stoxx Europe 600 slid 1.23% in early trading, marking broad weakness across multiple sectors.
Investors reacted swiftly to Trump’s announcement, which outlined 10% tariffs starting February 1 and rising to 25% by June 1 on goods from eight European NATO members, including Denmark, Germany, France, and the U.K. The measure comes amid the U.S. president’s unusual bid to purchase Greenland, a semi-autonomous Danish territory.
Automakers and Luxury Goods Take the Brunt
European carmakers were among the hardest hit, with Volkswagen down 2.82%, BMW shedding nearly 3.74%, and Porsche sliding 2.68%. The Stoxx Europe 600 Automobiles & Parts Index fell 2.22%, reflecting investor concerns over potential trade barriers affecting exports to the U.S.
Luxury brands also suffered steep losses. LVMH dropped 4.69%, Kering slipped 3.9%, and Hermes tumbled 4.45%, dragging the Stoxx Europe Luxury 10 Index down 3.15%. Analysts said these sectors are particularly sensitive to tariffs and cross-border consumer spending.
Select Sectors Show Resilience
Not all European stocks were affected equally. Defense companies and certain tech firms saw gains as investors shifted capital to perceived safe havens. Rheinmetall, the continent’s largest defense company, rose 1.08%, while French aerospace giant Thales added 0.73%.
Dutch semiconductor ASM International ended 0.81% higher, boosted by robust fourth-quarter bookings and revenue exceeding forecasts. ASML, a fellow chipmaker, remained largely flat despite earlier intraday losses.
Meanwhile, global investors sought safety in gold, with U.S. futures climbing to a 52-week high of $4,673.30 per ounce, up 1.7%, and spot gold reaching $4,672.66.
Also Read: European Stocks Plunge 1.4% Amid U.S. Tariff Threats — Could More Losses Loom?
Markets Brace for Davos and Eurozone Inflation Data
As Europe contends with tariff uncertainties, attention now turns to the World Economic Forum in Davos, Switzerland, where Trump is scheduled to speak on Wednesday. Traders will also monitor upcoming eurozone inflation data for signs of economic resilience amid rising geopolitical tensions.
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