European Stocks Close Weak On Tariff Concerns, Some Weak Earnings Updates

(RTTNews) - European stocks closed weak on Wednesday as concerns about tariffs, and reports that U.S. President Donald Trump will sack Fed Chair Jerome Powell sometime soon, hurt sentiment.

Investors also digested a slew of corporate earnings updates that fell short of expectations.

Disappointing updates from chipmaker ASML Holdings and French auto major Renault hurt sentiment.

The pan European Stoxx 600 closed down 0.57%. The U.K.'s FTSE 100 ended lower by 0.13%, Germany's DAX lost 0.21% and France's CAC 40 drifted down 0.57%. Switzerland's SMI edged up 0.08%.

Among other markets in Europe, Belgium, Czech Republic, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Portugal, Sweden and Turkiye closed weak.

Denmark, Russia and Spain ended higher, while Austria and Poland closed flat.

In the UK market, Ashtead Group, Croda International, WPP, Pershing Square Holding, Melrose Industries, Persimmon, St. James's Place, Unite Group, IHG, JD Sports Fashion, Centrica and BAE Systems lost 1 to 2.6%.

Intermediate Capital Group climbed nearly 3.5%. Hiscox closed lower by about 2.6%. Beazley, 3i Group, British American Tobacco, Vodafone Group, GSK, Games Workshop and Sainsbury (J) also closed notably higher.

Rio Tinto gained about 1.2%. The miner has advanced the timeline for shipments from its Simandou iron ore project in Guinea and reported a recovery in iron ore exports in Q2 following cyclone disruptions.

In the German market, Volkswagen, BASF, Porsche, Brenntag, Siemens Energy and Heidelberg Materials lost 2 to 3.7%.

Mercedes-Benz, Puma, Daimler Truck Holding, Fresenius, Henkel, Rheinmetall and Continental closed down 1 to 1.8%.

Munich RE climbed 1.6%. Bayer, Commerzbank, Hannover Rueck, Deutsche Bank, Allianz, Deutsche Boerse and Zalando gained 0.5 to 1%.

In the French market, Renault tanked nearly 19% after the company issued a profit warning reported first-half figures that fell short of expectations.

The automaker's first-half revenue came in at €27.6 billion, broadly in line with expectations. However, the operating margin came in at 6%, which was about 12% below consensus.

Renault now expects an operating margin of around 6.5% for the full-year, down from at least 7% previously, and cut its forecast for automotive free cash flow to €1-1.5 billion, from a prior target of at least €2 billion.

STMicroElectronics plunged more than 14%. Stellantis ended lower by nearly 6% after the carmaker scrapped its hydrogen fuel cell technology program and said it would no longer launch a range of hydrogen-powered vehicles this year due to factors such as limited availability of hydrogen-refueling infrastructure.

ArcelorMittal, Saint-Gobain, Kering, Edenred, Legrand, Schneider Electric, Bouygues, Carrefour and Accor lost 1 to 3%.

Vivendi gained more than 2%. Hermes International, Orange, Publicis Groupe, Sanofi, Essilor and Airbus gained 0.5 to 1%.

In economic news, UK consumer price inflation accelerated unexpectedly in June to the highest since January 2024 largely due to higher transport and food costs but the Bank of England is expected to loosen its policy further, given mounting concerns over economic conditions.

The consumer price index advanced 3.6% year-on-year in June, faster than the 3.4% rise in May, the Office for National Statistics reported today. Prices were expected to climb again by 3.4% in June.

The 3.6% inflation was the highest since January 2024. Moreover, it remains well above the Bank of England's 2% target.

Core inflation that excludes prices of energy, food, alcohol, and tobacco rose to 3.7% from 3.5% a month ago.