European stock markets began the final session of the week on a decidedly negative note, with the regional Stoxx 600 index moving broadly lower as a profit warning from automotive giant Volkswagen rattled the tariff-sensitive auto sector and overshadowed some pockets of positive corporate news.
Shortly after the opening bell, the pan-European Stoxx 600 was last seen trading 0.5% lower, with all sectors and major national bourses in negative territory.
The autos sector was a significant driver of this downturn, leading the losses after Volkswagen, one of the industry’s titans, cut its full-year guidance, explicitly warning that US tariffs were eating into its profits.
Pre-market futures had already signaled a weaker start, with those tied to the German DAX, Italian FTSE MIB, and French CAC 40 indexes all last seen trading 0.2% lower.
Futures for London’s FTSE 100 were also pointing marginally lower. This negative start on Friday follows a more positive session on Thursday, when regional shares had ended higher as investors focused on US-EU trade talks and a widely anticipated interest rate hold from the European Central Bank.
The tariff toll: Volkswagen and Puma feel the pinch
The impact of US President Donald Trump’s tariff regime is becoming increasingly evident in corporate earnings reports.
Germany’s Volkswagen announced on Friday that it was lowering its full-year guidance and reported a sharp 29% drop in its second-quarter operating profit, which came in at 3.83 billion euros ($4.49 billion), down from 5.4 billion euros a year ago.
This figure also missed the 3.94 billion euros that analysts had expected, according to a Factset-compiled consensus. The company directly cited the disruptive impact of US tariffs as a key reason for its weakened outlook.
German sports apparel giant Puma also issued a warning this morning, stating that it expects to record a loss this year, citing a decline in sales and the impact of US tariffs.
This follows a disappointing report from luxury behemoth LVMH, one of Europe’s most valuable companies, which had reported lower-than-expected quarterly sales late on Thursday.
A glimmer of hope: Remy Cointreau bucks the trend
Despite the generally downbeat mood, there was a notable bright spot. French drinks firm Remy Cointreau posted a 5.7% organic sales growth for its fiscal first quarter, a result that was ahead of analyst expectations and marked the company’s first quarter of growth since 2023.
Encouragingly, the cognac-maker also reduced its forecasts for the impact of tariffs, leading to an improved profit guidance for the full year.
It’s set to be a slightly quieter day on the earnings front compared to earlier in the week, but several other big names are due to report today, including British lender NatWest and Italian energy firm Eni.
These results will be closely watched for further insights into the health of the European corporate sector amid the challenging macroeconomic and trade environment.
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