European Stock Markets Decline

European stock markets fell on Friday as investors expressed concerns over a potential trade war with the US while analyzing crucial economic data.

At 06:50 ET (11:50 GMT), Germany’s DAX decreased by 1.5%, France’s CAC 40 dropped 1.1%, and the UK’s FTSE 100 slipped by 0.9%.

Trump Issues Tariff Threat Against EU

US President-elect Donald Trump reignited tensions with the European Union by threatening tariffs unless the EU addressed its substantial trade deficit by purchasing American oil and gas. This statement, made on Truth Social, raised concerns about US-EU trade relations. The eurozone economy struggles for growth, with Germany, the largest economy in the region, being significantly affected. A trade war could be economically burdensome at this point.

Data released earlier Friday indicated that German producer prices rose unexpectedly by 0.1% in November, contrary to predictions of a 0.3% decrease. Additionally, British retail sales saw an increase of only 0.2% in November, falling short of the expected 0.5%, reflecting slow economic momentum.

US Faces Imminent Government Shutdown

Political uncertainty in the US weighted on sentiment, with a partial government shutdown looming due to a failed spending bill backed by Trump. A faction of Republican lawmakers opposed the proposal, which intended to extend government funding for three months and suspend the debt ceiling for two years, introducing further unpredictability in the political landscape.

ITM Power Secures Green Hydrogen Project

In the corporate sector, ITM Power (LON:ITM) saw a 1% stock increase following its successful bid for a green hydrogen project in the EU. Conversely, Synairgen (LON:SYNG) shares plummeted by 40% after announcing a fundraising initiative to secure up to £19 million for phase 2 trials of its antiviral treatment. Additionally, Idorsia (SIX:IDIA) stock fell 45% after exclusive talks on global rights for hypertension medication Tryvio stalled, while Zealand Pharma (CSE:ZELA) stock dropped 20% after the US FDA denied approval for its bowel disease drug.

Oil Prices Down Amid Fed Signals and Demand Concerns

Crude oil prices fell as the Federal Reserve signaled a slower pace of rate cuts for the next year, bolstering the dollar to a two-year high. At 06:50 ET, Brent crude futures for February delivery declined by 1.1% to $72.08 per barrel, while West Texas Intermediate crude futures dropped 2.9% to $68.55 per barrel. Ongoing worries about decreasing demand, uncertainty surrounding Chinese stimulus measures, and signs of reduced U.S. fuel consumption further pressured prices. The anticipation of a US government shutdown raised market anxiety about potential disruptions in travel and economic activity.

*(Navamya Acharya contributed to this article.)