European financial markets today experienced a considerable slump on Monday, April 7. Trump’s trade tariffs continued at full speed on Monday, following three consecutive days of steep losses, with no sign of the bleeding stops. The Milan-based bourse ended the day down 6.53 percent. The Italia All-Share is firmly in the red, down 6.44 percent at 36,716 points. The Euro STOXX 50 fell 6% by 10:00 CEST, bringing its losses over the past three sessions to 14%.
The tariffs have affected all European countries. European policymakers reacted swiftly, with discussions underway on a coordinated retaliation. Traders have ramped up bets on interest rate cuts from the European Central Bank to shore up economic growth.
European Financial Markets Today: European Nightmare
European financial markets today plunged in their worst session since March 2020 as the global market rout intensified. Safe-haven assets gained as investors brace for prolonged volatility amid rising inflation fears and no immediate central bank support. The market pressure triggered by Donald Trump’s trade tariffs continued at full speed on Monday. It happened following three consecutive days of steep losses, with no sign of the bleeding stopping.
The Euro STOXX 50 fell 6% by 10:00 CEST, bringing its losses over the past three sessions to 14%. The broader STOXX 600 dropped 5.7%, extending its post-tariff announcement decline to 13%. The German DAX sank 7.2%, marking its most severe session since March 12, 2020. However, Italy’s FTSE MIB fell 6.5%, and Spain’s IBEX 35 lost 6%.
European Financial Markets Today: A Slump in European Shares
European shares slumped in a volatile session on Monday, April 7. In fact, the STOXX 600 closed at its lowest since January 2024. Meanwhile, US President Donald Trump showed no signs of letting up in his aggressive trade war. The pan-European STOXX 600 (.STOXX) opened a new tab, dropped 4.5%, and went down for the fourth straight session. Major bourses closed down between 4% and over 5%.
European Financial Markets Today also included Germany. Trade-sensitive Germany’s benchmark index (GDAXI) dove as much as 6.4%. It was down more than 20% from its March all-time closing high and on track to confirm a bear market, although it pared some losses to close down 4.3%.
European Financial Markets Today: Increased Inflation
“If the US catches a cold, the rest of the world catches the flu,” said Barry Knapp, managing partner of Ironsides Macroeconomics. “It was foolish to think that you can hide out in foreign markets because (the U.S.) is the biggest source of final global demands.”
Fears that the escalating trade war could sharply hit economic growth and increase inflation have slammed global equity markets in the past weeks. Investors rushed for safe havens, while bets on interest rate reductions from the European Central Bank (ECB) and the US Federal Reserve have risen. The ECB estimated that a blanket US tariff would lower eurozone growth by 0.3 percent in the first year. Meanwhile, EU counter-tariffs on the US would raise the damage to half a percentage point.
European Financial Markets Today: A Significant Decline in the Italian Stock Exchange
European financial markets today made a more significant impact on Italy. The Italian Stock Exchange suffered a significant one-day decline on Friday. It is despite Prime Minister Giorgia Meloni downplaying fears over US tariffs that triggered the sell-off. The Milan-based bourse ended the day down 6.53 percent. Moreover, the FTSE Italia All-Share is firmly in the red, down 6.44 percent at 36,716 points.
The FTSE MIB index has lost ground in eight of the last nine trading sessions. It was pushed lower, mostly by investor concerns over the economic impacts of US sweeping global tariffs. Stock markets across Europe have lost ground in recent days. Italy has proved particularly vulnerable due to its already slow economic growth and high dependence on exports. Around 10 percent of Italian exports across all sectors are destined for the United States.
European Financial Markets Today: No Country is Safe
The FTSE 100, US and European stocks plummeted on Monday. London’s premier index was 3.2% down by the closing bell in London. The biggest faller in early trade was British Airways owner International Consolidated Airlines Group (IAG.L), down 10.5%. Whereas, Engine maker Rolls Royce (RR.L) plunged 10.2%.
Chris Beauchamp, chief market analyst, said that traders have returned from the weekend to the nightmare of Trump’s trade wars. He also said that Asian markets suffered huge losses and triggered circuit breakers in the region. Beauchamp believes that future losses are on the cards in Europe and the US, suggesting that the rush to get out at any price has not yet abated.
European Financial Markets Today: Investors Will Retaliate
Trump denies causing market sell-offs but sticks to the trade deficit goal. European policymakers reacted swiftly, with discussions underway on a coordinated retaliation. Spain’s Economy Minister Carlos Cuerpo stated they have the necessary tools to respond. This statement reflects a growing consensus for retaliation. The tit-for-tat tariffs between the world’s largest economies mark a sharp escalation in the global trade war. They threaten to raise prices, upend supply chains, and squeeze corporate profit margins.
The response from other nations is now in focus. France’s industry minister called for a proportionate but firm response and said Europe remained open to negotiating a solution. Traders have ramped up bets on interest rate cuts from the ECB to shore up economic growth. Traders now see a chance of nearly 90% of the ECB making a quarter-point rate cut later this month. The cut is along with two more reductions widely expected by year-end. Moreover, the EU and China retaliated by imposing more tariffs on the US. As a result, European stocks fell to the lowest since January 2024. The reactions of the EU and China escalated President Donald Trump’s trade war.
