European Stocks Stumble into the Weekend

European stocks extended losses for a second session on Friday, with both the Stoxx 50 and Stoxx 600 down around 1%.

Defense stocks led declines as signs of progress emerged in a US-brokered peace deal in the Middle East. Israel confirmed that a ceasefire with Hamas took effect at noon local time, with troop withdrawals from parts of Gaza as hostages were released under the agreement.

The Stoxx Europe Aerospace and Defense index slumped over 2%, led by Leonardo (-5.6%), Rheinmetall (-2.5%), Thales (-2.4%), Saab (-2.2%), BAE Systems (-1.9%), Rolls-Royce (-1.7%), Safran (-1.6%), and Airbus (-1%).

Mining shares also weakened, with the Stoxx Europe Basic Resources index down more than 1.5%.

Sentiment toward the close also tumbled after President Donald Trump threatened a “massive increase” of tariffs on Chinese goods, rekindling fears of a renewed trade war.

On the upside, Denmark’s Jyske Bank rose 4% after upbeat corporate updates boosted investor confidence.