European stocks drop as investors eye U.S.-China trade spat, Michelin outlook cut

Published 14/10/2025, 09:36
Updated 14/10/2025, 09:46
© Reuters

Investing.com - European stock markets fell on Tuesday, as worries over trade tensions between the U.S. and China as well as a slide in shares of French tiremaker Michelin combined to weigh on equities in the region.

By 04:15 ET (08:15 GMT), the pan-European Stoxx 600 had slipped by 0.7%, hovering around a two-week low despite a rebound in the prior session. Meanwhile, the DAX in germany had dropped by 1.0%, the FTSE 100 in the United Kingdom had slid by 0.3%, and the CAC 40 in France had decreased by 0.8%.

Global equities have been bumpy in recent sessions. On Monday, stocks rebounded from late last week, after U.S. President Donald Trump appeared to rein in his strident rhetoric about China. Trump previously saying he would slap triple-digit tariffs on the country after Beijing moved to expand its restrictions on exports of critical rare earth materials.

Although Trump has seemingly assume a more conciliatory stance, some concerns have continued to swirl around the trade spat between the world’s two largest economies, particularly following a decision by both sides to impose additional port fees on ocean shipping groups.

Traders were also monitoring ongoing political upheaval in France. Two no-confidence motions -- from parties on both the extreme left and right -- facing Prime Minister Sebastien Lecornu are threatening to potentially bring down the latest French government by the end of the week.

Speaking on Monday, French President Emmanuel Macron rejected calls for him to resign, even as his rivals have suggested that the only way to resolve one of France’s greatest political crises in decades is for him to depart.

In individual stocks, shares of Michelin slumped by more than 8% after the company slashed its annual outlook due to challenging business conditions in North America which have hit its margins and sales. Peers such as Pirelli in Italy and Continental in Germany subsequently dipped.

Elsewhere, Swedish telecoms gear manufacturer Ericsson spiked by over 14% on quarterly earnings that increased by more than analysts had anticipated.

Oil slips

Oil prices dropped on Tuesday, reversing earlier gains, as concerns swirled around whether the latest flare-up in trade tensions between the U.S. and China will dent global crude demand.

Brent crude futures slipped by 1.8% to $62.21 per barrels by 03:47 ET, while U.S. West Texas Intermediate fell 1.8% to $58.43 a barrel.

Markets will also be keeping an eye on the International Energy Agency’s monthly oil market report, which is set to be published today. The release includes an analysis of trends in global crude supply and demand.

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