European markets opened lower on Friday, snapping a four-day winning streak, as investor sentiment weakened amid renewed concerns over global trade tensions.
The Stoxx Europe 600 index was down 0.46%, with all sectors except oil and gas and insurance trading in the red.
The pullback follows US tariff actions announced Thursday by President Donald Trump, who confirmed plans to impose a 35% duty on Canadian imports beginning August 1, along with a separate 50% tariff on all copper imports.
The announcements appeared to reignite fears about slowing global growth, after investors had largely shrugged off similar developments earlier in the week.
Markets turn cautious after record gains
Despite the tariff headlines, global markets have posted strong performances in recent days.
The UK’s FTSE 100, as well as the S&P 500 and Nasdaq Composite, each closed at record highs earlier this week.
However, Friday’s session in Europe suggests that optimism may be giving way to caution as investors digest the implications of widening trade restrictions.
Among individual sectors, European personal and household goods stocks fell 1%, while healthcare stocks declined 0.7%.
Defence stocks bucked the trend, rising 0.6%.
The broader Stoxx 600 index had climbed steadily over the past week, supported by firm US economic data and resilient earnings expectations. But escalating trade tensions are now testing investor confidence.
UK economy contracts
The UK economy unexpectedly contracted by 0.1% in May, marking a second consecutive monthly decline and signaling a sharp loss of momentum after strong growth earlier in the year.
Data released by the Office for National Statistics on Friday showed that May’s drop followed a 0.3% contraction in April and was well below the 0.1% growth forecast by economists surveyed by Reuters.
The decline was led by weakness in production and construction, raising concerns about a broader slowdown in the second quarter after the economy expanded by 0.7% in the first quarter.
Following the data release, the pound slipped 0.2% against the dollar to $1.35.
EU awaits clarity on Tariffs
One key uncertainty weighing on markets is the European Union’s status in the evolving US trade agenda.
Trump said Thursday that the EU could receive a letter by Friday outlining the tariff rates it will face, potentially disrupting months of negotiations aimed at reaching a new trade framework between Washington and Brussels.
The prospect of new US tariffs on European goods has raised concerns about retaliatory measures and their potential economic fallout.
EU trade officials have not yet commented on whether a letter has been received or what products might be targeted.
Trump has intensified his trade actions in recent days, announcing new tariffs against multiple countries and emphasizing the need to address what he described as unfair trade practices and national security risks tied to trade deficits.
Wall Street on Thursday
Meanwhile, US stocks closed higher on Thursday, continuing their upward momentum.
The Dow Jones Industrial Average gained 192.34 points, or 0.4%, to end at 44,650.64.
The Nasdaq Composite edged up 19.33 points, or 0.1%, to 20,630.66, while the S&P 500 rose 17.20 points, or 0.3%, to 6,280.46.
The major averages pulled back slightly from intraday highs but still posted positive finishes, with both the S&P 500 and Nasdaq notching new record closes.
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