(Bloomberg) — European stocks fell as President Donald Trump’s latest tariff moves sowed fresh confusion over the outlook for global trade. Shares in Novo Nordisk A/S slumped after its next-generation obesity shot drug fell short of Eli Lilly & Co.’s rival blockbuster in a trial.
The Stoxx Europe 600 Index was down 0.5% at the close. Financial services, media and travel stocks were among the biggest laggards, along with trade-related sectors including autos and industrials. The personal care as well as the utilities sector outperformed.
The European Parliament’s main political groups said Monday they’ll suspend legislative work on approving the US trade deal. That comes after Trump responded to the US Supreme Court striking down his global tariffs by imposing a new global levy and vowing to use other powers to maintain his signature tariff policies. On Saturday, he said he would raise that rate to 15%.
After the Supreme Court ruling, “it appears options are now limited and less severe,” which should be good for sectors like consumer stocks, said Andrea Gabellone, head of global equities at KBC Securities. Still, “the question is whether other market participants are willing to stand the certain ‘volatile’ tariff newsflow coming up,” he said.
The tariff news adds further complexity for investors already grappling with worries over stretched valuations and disruption from artificial intelligence. They are also monitoring developments over Iran, before talks resume with the US on Thursday as the two sides look for a diplomatic solution to the standoff over Tehran’s nuclear program.
In individual stocks, Novo Nordisk slumped 16% to a 2021 low after its CagriSema obesity shot delivered less weight loss than Eli Lilly’s tirzepatide. Johnson Matthey Plc shares slumped 16% after the chemicals firm agreed to sell Catalyst Technologies to Honeywell International Inc. at a lower price than originally planned. Belimo Holding AG dropped 10% after analysts expressed concerns over the heating and cooling equipment maker’s guidance for 2026 and the delayed impact of tariff decisions.
Key events for markets this week include Trump’s State of the Union Address on Tuesday and Nvidia Corp. results on Wednesday. KBC’s Gabellone also highlighted the potential for more volatility in software stocks as new Anthropic models come out.
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–With assistance from Jan-Patrick Barnert and Michael Msika.
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