European markets closed mixed on Friday, extending a remarkable 10-week winning streak despite uncertainty stemming from U.S. President Donald Trump’s renewed tariff threats. The pan-European Stoxx 600 index pulled back from earlier losses to finish fractionally above the flatline.
Technology Sector Hit by Nvidia Fallout
The Stoxx Technology index emerged as the worst performer of the day, dropping 1.5% as it continued to feel the knock-on effects from Thursday’s sell-off of chipmaking giant Nvidia. The global tech bellwether managed a slight rebound on Friday, but investors remained cautious while digesting its quarterly earnings report.
Dutch semiconductor manufacturer BE Semiconductor fell 1.7%, while ASM International and ASML both shed more than 2%. The tech sector’s decline mirrored broader global tech market concerns triggered by Nvidia’s mixed results and ongoing U.S. trade policies.
Trump’s Tariff Threats Cloud Market Sentiment
Market uncertainty was compounded by Trump’s latest round of tariff threats. Earlier this week, Trump announced plans to impose 25% duties on imports from the European Union, targeting “cars and all other things.” The president also confirmed that sweeping 25% tariffs on goods entering the U.S. from Canada and Mexico would take effect on March 4, while China would face additional 10% tariffs.
Despite the sweeping tariff announcements, Trump hinted at a possible exemption for Britain following talks with U.K. Prime Minister Keir Starmer in Washington on Thursday, temporarily easing investor concerns about a broader economic impact on European markets.
Mixed Market Performance and 10-Week Winning Streak
Despite Friday’s market downturn, the Stoxx 600 ended the week with a modest gain, extending its unbroken 10-week winning streak. The index has added more than 3% in February, reflecting continued optimism despite geopolitical tensions and economic headwinds.
Meanwhile, the S&P 500 struggled, recording a loss of around 2.5% for the month. European markets have outperformed their U.S. counterparts so far this year, driven by a combination of solid earnings, a brighter economic outlook, and hopes for a resolution to the Russia-Ukraine conflict.
Outlook and Market Sentiment
The market’s resilience in the face of geopolitical uncertainty underscores investor confidence in Europe’s economic recovery. However, analysts caution that continued tariff threats and mixed earnings reports could introduce volatility in the weeks ahead.
As global investors keep a close eye on further developments from Washington, market sentiment is likely to hinge on the outcome of U.S.-EU trade negotiations and ongoing economic data releases.
Conclusion: A Cautious Optimism
European markets continue to show remarkable resilience, navigating geopolitical uncertainties and sector-specific challenges. With the Stoxx 600 maintaining a 10-week winning streak, the outlook remains cautiously optimistic. However, ongoing trade tensions and economic headwinds warrant vigilant monitoring as markets head into March.