Money Flow & EU Session: European Markets Head for Negative Start after New Tariff Threats from Trump

Futures on the Stoxx 50 are down 0.7% after President Trump announced that he would impose a 25% tariff on the European Union, without providing additional details. Later, a White House official stated that all options are being considered regarding whether these tariffs will affect all exports from the bloc or only certain products or sectors. According to analysts’ estimates, a total rate of 25% could hit GDP by up to 1.5%.

The euro is weakening by 0.1% against the US dollar, in line with movements across the rest of the G-10. Traders will be watching the inflation data from Spain, which will be released later this morning, to gain guidance on where the eurozone indicator may position itself next week, ahead of the European Central Bank meeting. It is difficult to expect the ECB to do anything other than lower the interest rate by 25 basis points, but high inflation could raise the risk of a more hawkish tone in the statement. Combined with the increasing uncertainty surrounding tariffs, this could create an unfavorable environment for European stocks, which are holding close to record levels.

Futures on the S&P 500 are up 0.4%, while those on the Nasdaq 100 add 0.5%, despite Nvidia’s “disappointing” results. Shares of the chip maker are down 1.5% in after-hours trading after the company failed to deliver the exceptional results investors have become accustomed to. Asian markets are mostly lower, although they are rising towards the end of the session. The yield on 10-year US Treasury bonds rises by 2 basis points to 4.27%, while the dollar index increases by 0.2%.