By Harshit, London, September 26, 2025 — 10:05 CEST
European stocks opened broadly higher on Friday as investors reacted to the latest trade policy announcements from the White House and assessed the potential impact on key sectors. The pan-European Stoxx 600 index was up 0.2% by mid-morning in London, with most sectors trading in positive territory.
Market Performance: Moderate Gains Across Europe
Major European benchmarks all recorded modest gains. France’s CAC 40 rose 0.44% to 7,829.96, while Italy’s FTSE MIB added 0.38% to 42,402.40. The U.K.’s FTSE 100 gained 0.36% to 9,247.47, Germany’s DAX climbed 0.37% to 23,621.54, and Spain’s IBEX 35 was up 0.55% at 15,236.60. The broader STOXX Europe 600 index traded at 551.85, a 0.30% increase.
Despite the positive tone, the healthcare sector experienced volatility in early trade. The Stoxx Europe 600 Healthcare index oscillated above and below the flatline, last seen down 0.2%.
Policy and Government Actions: U.S. Tariff Announcements
The market reaction was heavily influenced by U.S. trade policy updates. President Donald Trump announced that pharmaceutical imports to the United States would face a 100% tariff starting October 1. Companies that construct manufacturing facilities in the U.S. would be exempt, provided construction begins promptly. This announcement followed previous threats of tariffs up to 200% on imported pharmaceuticals.
Shares of European pharmaceutical companies reacted sharply. Denmark’s Zealand Pharma fell 2.5%, while Novo Nordisk and Finland’s Orion dropped more than 2% in early trading. However, JP Morgan strategists issued a note suggesting that the impact would be largely manageable. “The potential 100% tariff should largely be avoidable with U.S.-based manufacturing buildout,” they said, adding that overall exposure for large-cap pharmaceutical companies remained limited despite some uncertainty.
In addition, President Trump announced 25% tariffs on heavy trucks, set to take effect next month. These measures have heightened investor focus on trade-sensitive sectors across Europe.
European Trade Policies and Economic Measures
European trade policies are also under scrutiny. German media reported that the European Union is considering tariffs of up to 50% on Chinese steel imports in the coming weeks. Investors are monitoring these developments closely, particularly after the U.S. launched a national security probe into medical device imports, which could pave the way for additional tariffs.
Overnight in Asia, pharmaceutical stocks recorded losses as markets reacted to the looming U.S. tariffs, adding to global market uncertainty.
Economic Data: Key Releases
Friday will see several significant economic updates from Europe. Spain is set to release its latest inflation data, while the U.K. will publish mortgage lending figures. Investors are also awaiting a report on European economic sentiment, which could provide further insight into consumer and business confidence across the bloc.
Analysts say these indicators, combined with the ongoing trade tensions, will be critical for assessing the near-term outlook for European markets.
Market Outlook: Caution and Opportunities
Despite modest gains, market participants remain cautious. Trade policy uncertainty, potential tariffs, and sector-specific risks are likely to continue influencing investor behavior. At the same time, analysts note that the impact of certain tariffs may be mitigated by companies’ strategic responses, such as building local manufacturing capacity.
“The markets are balancing the potential risks of new tariffs with the broader strength of European corporate earnings,” said a London-based market strategist. “While volatility is likely in sectors like healthcare and industrials, diversified exposure and proactive company strategies should help manage downside risks.”
Overall, European markets are navigating a complex mix of geopolitical and economic factors, with investors closely watching both policy announcements and incoming economic data to guide their decisions.
