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European Earnings Reflect Growing Tariff Risk, Says BlackRock’s Jewell

European corporate earnings are starting to show cracks as investors brace for potential fallout from rising transatlantic trade tensions, according to BlackRock’s Deputy CIO for EMEA, Helen Jewell. With U.S.-EU tariff threats back in focus, many companies across the continent are already adjusting their outlooks—and the markets are taking notice.

EU Companies Shift Gears Amid Trade Uncertainty

Speaking in a recent interview, Jewell noted that tariff risk is increasingly being priced into European equity markets, especially in export-heavy sectors like industrials, autos, and luxury goods. “The tone in earnings commentary has clearly shifted. Companies are becoming more cautious, and that's reflected in valuations,” she said.

Recent reports echo that sentiment. As Yahoo Finance highlights, the uncertainty surrounding the next round of U.S. tariffs—especially under a potential Trump administration—has prompted analysts to downgrade several earnings forecasts.

This cautious approach is especially visible in Germany and France, where firms with high exposure to U.S. markets are reassessing their second-half projections.

Market Mood Dampened by Trade Headlines

Currency markets are also reacting. The EUR/USD pair has remained range-bound as investors weigh the likelihood of new trade barriers. Although the euro ticked up slightly, gains were capped by lingering fears over tariff policy and broader geopolitical friction.

According to Invezz, escalating rhetoric around tariffs could unravel years of trade progress between Washington and Brussels—sending shockwaves through EU business confidence and investor appetite.

Investors Eye Policy Clarity Before Reentry

With European earnings now at the mercy of political decisions, many institutional investors are staying on the sidelines. Jewell believes a clearer trade roadmap is needed before markets can fully regain momentum.

“We’re not talking about a full-scale panic, but there’s definite hesitation,” she said. “Until we get clarity from policymakers, investors will continue to tread carefully.”

For now, the European equity outlook remains clouded. Whether tariff tensions escalate or ease will determine how much ground the region’s markets can reclaim in the months ahead.

 

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