European equity markets continued their decline, with the Stoxx 600 index dropping 2.5% in London, marking its worst performance in eight months. The banking sector experienced a significant selloff, plummeting 7.4%, driven by concerns of a global economic slowdown. Bank of America analysts highlighted banks' vulnerability to macro troubles.
Retail and shipping stocks also suffered losses, with the Stoxx Luxury 10 index falling 5.2%. Shipping giants Maersk and Hapag-Lloyd each sank over 9%, reflecting fears of declining global trade volumes following U.S. President Trump's tariffs on goods from over 180 countries, including duties on imported vehicles, steel, and aluminum.
The euro initially surged to a six-month high against the U.S. dollar but retreated 0.2% as markets stabilized. European leaders are considering countermeasures, with the EU preparing responses if negotiations with the U.S. fail. Tariffs of 20% were imposed on the EU, 10% on the UK, 15% on Norway, and 31% on Switzerland. Goldman Sachs has trimmed growth outlooks for several European countries, including the UK.