European stock markets declined on Tuesday, reaching a two-week low, as fresh worries about the US-China trade conflict resurfaced and corporate news, specifically from French tire maker Michelin, weighed heavily on the market.
The overall STOXX 600 index fell by 0.6%. Investors were nervous after both the US and China began imposing new port fees on shipping companies, a move that signals an expansion of the trade war despite earlier hopes for talks.
This anxiety hit the miners sector the hardest, which fell by 2%.
The automakers sector also dropped 1.5%, largely due to Michelin, whose stock plunged 9.3% after the company cut its financial outlook for the entire year. Michelin blamed worse-than-expected sales and falling profit margins in the North American market.
Other related companies, like Germany’s Continental and Italy’s Pirelli, also saw their shares fall.
Bucking the trend, Swedish telecoms firm Ericsson soared 12.4% after it reported stronger-than-expected quarterly profits and downplayed the potential negative effects of the new US tariffs.
On the FX front, the U.S. dollar’s strength was brief on Tuesday, as it weakened against many other major currencies.
Both the euro and the British pound (sterling) saw small gains against the dollar. Currencies often seen as a measure of investor risk appetite, the Australian dollar and the New Zealand dollar, both suffered heavy losses, dropping 0.63% and 0.5%, respectively.
In contrast, traditional safe-haven currencies, those investors turn to during times of uncertainty were gaining ground. The Swiss franc rose 0.2%, and the Japanese yen reversed its earlier losses to climb 0.3% against the dollar.
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