By Barbara Kollmeyer, MarketWatch
European stocks finished lower on Friday, but registered a second straight weekly gain, after U.S. President Donald Trump threatened China with additional tariffs.
The White House announcement unsettled markets, ratcheting up the possibility of a prolonged trade conflict, after a week of tit-for-tat moves by Washington and Beijing.
How markets are moving
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.69% slipped 0.4% to 374.82, erasing a small part of a 2.4% rise logged on Thursday, when the index rallied to its best one-day percentage gain since June 19, 2016 on an easing in trade-war worries. For the week, the pan-Europe gauge rose 1.1%, marking its second weekly rise in a row.
But stocks pared some losses. In Frankfurt, the DAX 30 /zigman2/quotes/210597999/delayed DX:DAX +0.95% fell 0.5% to 12,241.27 after soaring 2.9% on Thursday for its best single-session gain since April 24. In Paris, the CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.78% slipped 0.4% to 5,258.24, after its best one-day rise in almost a year. For the week, the index rose 1.8%.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.1075% traded at $1.2261, slightly above $1.2242 seen late Thursday in New York.
What’s driving markets
Trump said the U.S. is exploring the possibility of imposing tariffs on another $100 billion worth of Chinese goods. The move could escalate a fragile situation between the two countries that has seen tit-for-tat tariff announcements against the other in recent days.
In recent sessions, global equity markets have had a bumpy ride as traders shifted from pessimism to optimism and back again over the prospect of a trade war between the world’s two biggest economies.
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Also in focus for investors are the U.S. monthly jobs data, a reflection of the health of the country’s economy. Many European companies count the U.S. as a key market.
What strategists are saying
“It all looks more like a classic Trump negotiation—float an extreme position, to step back from the worst-case scenario in return for some big concessions. Both sides would prefer to negotiate a settlement,” said Neil Wilson, senior market analyst at ETX Capital.