European Stocks Decline as Trump Tariff Threats and Middle East Tensions Pressure Markets

European equities moved lower on Friday, extending losses from the previous session as investors reacted to renewed trade tensions between the United States and the European Union alongside escalating geopolitical risks in the Middle East.

The STOXX Europe 50 fell 1.1%, while the STOXX Europe 600 declined 0.8%.

Market sentiment weakened after U.S. President Donald Trump threatened to impose “much higher” tariffs on the European Union by July 4 if the bloc fails to reduce tariffs on U.S. goods to zero. The comments followed a conversation with Ursula von der Leyen, who said the European Union was making “good progress” in negotiations aimed at lowering trade barriers ahead of the deadline.

Geopolitical concerns also weighed on risk appetite after the United States launched strikes on Iranian military targets following attacks on three U.S. Navy destroyers near the Strait of Hormuz, intensifying fears over potential disruptions to global energy markets and shipping routes.

Corporate earnings remained another key focus for investors across the region.

Shares of International Airlines Group fell about 3% after the airline group lowered its annual profit outlook, citing higher jet fuel costs linked to rising energy prices. Meanwhile, Intesa Sanpaolo slipped 1.1% ahead of its quarterly earnings release.

Despite Friday’s pullback, European markets still closed the week higher overall, with the STOXX Europe 50 gaining 1.5% and the STOXX Europe 600 advancing 0.8% over the week.