European equities edged lower on Friday as investor sentiment soured amid renewed uncertainty around global trade negotiations and weaker-than-expected economic data from Germany. The downturn marks a cautious end to the week as market participants await clarity from the U.S. on tariff measures.
As of 07:05 GMT, Germany’s DAX slipped 0.2%, France’s CAC 40 dropped 0.7%, and the U.K.’s FTSE 100 declined 0.3%. With U.S. markets shut for the Independence Day holiday, trading volumes were expected to remain light.
Trade Anxiety Builds as U.S. Tariff Deadline Approaches
Optimism around potential trade agreements with the U.S. had helped lift European stocks to near-record highs in recent sessions. But concerns resurfaced after President Donald Trump confirmed that countries not yet aligned with Washington would soon be notified of the specific tariff rates on their exports.
Letters detailing the planned duties were expected to be sent out on Friday, with rates ranging from 10% to as high as 70%. These new levies are scheduled to take effect starting August 1, with a July 9 deadline looming for finalizing trade deals.
The European Union is aiming to strike a preliminary agreement with the U.S. ahead of that deadline. However, EU negotiators remain cautious, preparing for the possibility of renewed tariff retaliation if talks fall apart.
German Industrial Orders Post Sharp Decline
Economic concerns deepened with fresh data out of Germany showing a surprise drop in industrial orders. New orders fell 1.4% month-on-month in May, significantly underperforming forecasts. The steep decline was largely driven by a 17.7% plunge in the computer, electronic, and optical goods sector — a reversal following large-scale orders in April.
While the drop may be a temporary correction, it casts doubt on the stability of Germany’s recovery and, by extension, the wider eurozone. The European Central Bank has lowered interest rates by 200 basis points since June 2024 but paused this month, although another cut to 1.75% remains likely later this year.
Air France-KLM Expands Stake in SAS
In corporate news, Air France-KLM (EU:AF) announced plans to raise its stake in Scandinavian carrier SAS from 19.9% to 60.5%, acquiring shares held by Castlelake and Lind Invest. The move is part of a strategic effort to expand in Northern Europe and create operational synergies.
Separately, rail manufacturer Alstom (EU:ALO) revealed it secured a €2 billion contract from the New York Metropolitan Transportation Authority to supply M-9A railcars for Long Island and Metro-North lines, strengthening its presence in the U.S. infrastructure market.
Crude Prices Ease Ahead of OPEC+ Gathering
Oil prices slipped slightly on Friday as traders awaited signals from this weekend’s OPEC+ meeting, where another modest output increase is anticipated. Brent crude futures dropped 0.4% to $68.51 per barrel, while WTI futures edged down 0.3% to $66.82 per barrel.
Despite the pullback, both benchmarks are on track to close the week higher by 1–2%, recovering some of the steep losses suffered in the prior week.
OPEC+ is expected to agree on a production hike of 411,000 barrels per day in August, maintaining its gradual rollback of supply curbs imposed over the past two years to support prices.
In geopolitics, Axios reported that U.S. and Iranian officials could resume nuclear talks as early as next week. Iran’s foreign minister reaffirmed the country’s commitment to the Nuclear Non-Proliferation Treaty, signaling a potential diplomatic thaw that could influence future oil supply dynamics.
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