European Stocks Rebound, Swiss Stocks Dip on Shock US Tariffs

(Bloomberg) — European shares recovered after sliding by the most since April in the previous session, while the Swiss market retreated as traders had their first opportunity to react to a 39% US export tariff.

The Stoxx Europe 600 Index gained 0.9% by the close, with banks and insurance stocks outperforming the most. Automakers and retailers were among the laggards.

Switzerland’s benchmark SMI Index fell as much as 1.9% before paring declines to 0.2% as trading resumed following Friday’s public holiday. The tariff announced last week is one of the steepest globally, and the Swiss government said Monday it was determined to give the US better trade terms as it seeks an improved deal.

“It remains to be seen what impact the Swiss tariffs will have,” said Daniel Murray, chief executive officer of EFG Asset Management. “This is partly because there is always the possibility that Switzerland is able to negotiate improved terms.”

UK lenders rallied after they won a major reprieve in a pivotal UK car finance case. Close Brothers Group Plc jumped 23% while Lloyds Banking Group Plc climbed 9%.

Despite Monday’s upbeat session, the Stoxx 600 has kicked off August with questions around the impact of US tariffs. In addition to Switzerland, Trump also announced a slate of duties on countries including Canada, New Zealand and South Africa last week. The pharma sector is also in focus as the US president pushes for lower drug prices.

The benchmark index could face further volatility as it navigates historically weak seasonal trends over August and September.

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–With assistance from Sagarika Jaisinghani and Charles Riley.

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