European Shares Slide Amid U.S.-China Trade Tensions and Corporate Earnings

European stock markets declined on Tuesday as escalating trade tensions between the United States and China rattled investors. Fresh U.S. tariffs of 10% on Chinese imports took effect, prompting China to impose retaliatory tariffs and export restrictions, stoking fears of a prolonged trade war between the world’s two largest economies.

The pan-European STOXX 600 dropped 0.6% to 531.46, following a 0.9% decline on Monday. Major indices, including Germany’s DAX, France’s CAC 40, and the U.K.'s FTSE 100, slid between 0.5% and 0.6% as investor sentiment weakened.

Corporate Earnings Impact Market Moves

Among individual stocks, Vodafone plummeted 6% in London trading after reporting another revenue decline in its key German market for the third quarter. The telecom giant continues to face headwinds in Europe’s largest economy.

Global spirits leader Diageo slumped 4% after the company abandoned its long-standing sales growth guidance, raising concerns over future revenue prospects.

Conversely, Infineon Technologies surged 10% after the German chipmaker raised its full-year sales forecast, driven by stronger-than-expected first-quarter revenue. The optimistic outlook provided a rare bright spot in an otherwise gloomy session.

French banking giant BNP Paribas gained nearly 2%, buoyed by the announcement of a new share buyback program and a higher-than-expected dividend payout. The move reinforced investor confidence in the bank’s financial stability.

However, Swiss lender UBS slipped 2.4%, despite reporting better-than-expected profits for the final quarter of 2024. Investor concerns over broader economic conditions and future earnings potential weighed on the stock.

Overall, European markets remained under pressure amid global trade uncertainties and mixed corporate earnings, with investors closely monitoring geopolitical developments and economic data for further direction.