By Carla Mozee, MarketWatch
European benchmarks closed lower across the board on Monday, marking a downbeat start for stocks to kick off the second half of 2018 as U.S. President Donald Trump signaled his resolve to target exports from the European Union.
How markets are moving
France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -0.72% declined by 0.9% to 5,276.76, and Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -0.80% fell 0.6% to 12,238.17, putting the German benchmark perilously close to entering correction territory. The index is down 9.8% from its record on Jan. 23, according to WSJ Market Data Group. The gauge had briefly been down below that level before bouncing somewhat on Monday.
The U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.04% fell 1.2% to 7,547.85, and Spain’s IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX -0.95% closed 0.7% lower at 9,558.30, off the lows of the session, however.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0617% fell to $1.1646 from $1.1683 late Friday in New York.
What’s driving the market
Investors once again fled European stocks on trade-war worries. The European Union has threatened $300 billion in fresh tariffs against U.S. products if Trump follows through on levies targeting the trade bloc’s auto makers, according to a Financial Times report on Sunday.
Trump, in a Fox News interview on Sunday, once again claimed European officials haven’t acted fairly in its trade relationship with the U.S.
“The European Union is possibly as bad as China, just smaller. It’s terrible what they do to us,” said Trump, who also touched on the European auto industry.
“Take a look at the car situation, they send their Mercedes in, we can’t send our cars in. Look what they do to our farmers? They don’t want our farm products,” he said.
The U.S. has already imposed tariffs on steel and aluminum imports from the EU, and the 28-nation trade bloc has issued levies in response.
This marks a key week for the U.S. and China, as Washington on Friday is expected to formally impose tariffs on a round of Chinese goods, and Beijing is expected to retaliate. New Chinese manufacturing activity data showed signs of stress stemming from the trade dispute between the world’s largest economies. A subindex in China’s official manufacturing purchasing managers’ index that gauges demand for Chinese exports contracted to 49.8 in June from 51.2 in May.
Ahead of Europe’s open, the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.06% tumbled 2.5% following the data. Meanwhile, Dow Jones Industrial Average tumbled more than 150 points ahead of Wall Street’s open, but pared its losses somewhat in midday trade in New York.