US100 drops 1.50% 📌

The U.S. stock market is returning to a sell-off, even though signs of recovery were visible at the start of the cash session. Russia has informed the U.S. that it is interested in reaching a peace agreement with Ukraine. However, investor focus today is on the growing tensions between the U.S. and the EU, which seem to be weighing more heavily on the stock market.

The market is experiencing another strong sell-off today. The US100 tech index is leading the declines, losing nearly 1.60%. Investors are concerned about rising trade tensions and the new tariffs announced unexpectedly by Donald Trump. The semiconductor sector is holding up relatively well with only minor losses, but the broader index is being dragged down by major Big Tech companies such as Apple, Alphabet, Tesla, and Oracle.
Source: xStation 5

Trump Threatens Tariffs on European Alcohol

President Donald Trump has threatened to impose a 200% tariff on wines, champagnes, and other alcoholic beverages imported from France and other EU countries. This marks another escalation in the growing transatlantic trade war. Trump stated on social media that he will enforce the tariffs if Brussels proceeds with its plan to tax U.S. whiskey exports—a retaliatory measure against the U.S. tariffs on steel and aluminum that took effect on Wednesday.

New reports indicate that the EU is open to negotiations with Trump, with an initial meeting scheduled for tomorrow. However, European Commission President Ursula von der Leyen has maintained that the EU will defend its position and existing tariffs.

Reaction of European Markets

In response to Trump's threats, European alcohol producers' stocks fell sharply:

• LVMH, owner of champagne houses Moët & Chandon and Veuve Clicquot, lost 2.2%.
• Rémy Cointreau SA, a cognac producer, dropped 4.5%.
• Pernod Ricard, a spirits manufacturer, declined 3.6%.

Potential Ceasefire in Ukraine

Trade tensions have overshadowed positive news about a potential ceasefire between Russia and Ukraine. On Thursday, President Putin stated that he is in principle open to a U.S. proposal for a 30-day ceasefire in Ukraine but emphasized that conditions still need to be finalized, stressing that any agreement should lead to a lasting peace.

"This idea is fundamentally correct, and of course, we support it," Putin said at a press conference in Moscow. "But there are issues we need to discuss, and I think we must address them with our American colleagues and partners."

Putin’s close advisor, Yuri Ushakov, indicated that Russia seeks a long-term solution rather than just a temporary ceasefire in Ukraine. His comments, cited by Interfax, suggest that Russia may not be willing to accept the 30-day truce that U.S. negotiators are pushing for, in line with Trump’s promise to end the war quickly.

Better PPI Data Has Limited Market Impact

Today's PPI data confirmed yesterday’s stronger-than-expected CPI reading, but the market reaction was short-lived. Investors quickly shifted their focus back to Trump's trade policy. Investors currently price in a full Fed interest rate cut in June/July and almost three full cuts in the entire 2025 year. 

Implied interest rate cuts in the U.S. Source: Bloomberg L.P.