Goldman Sachs cuts 12-month forecast for Europe’s STOXX 600 on tariff concerns

Goldman Sachs has revised its 12-month forecast for the European STOXX 600 index down to 570 from 580. The revision reflects concerns about the potential impact of US President Donald Trump's tariff plans on European markets.

Against this backdrop, European stock markets have been volatile. The STOXX 600 index fell 1.51%, hitting its lowest in nearly eight weeks. Major indexes in Frankfurt, London and Paris also recorded losses of between 1.7% and 2%.

Tariff concerns are not only affecting stock markets but also economic forecasts. Goldman Sachs now sees a 35% chance of a US recession, up from 20% previously. The bank also predicts that President Trump will announce an average 15% tariff on all US trading partners on April 2.

In addition, Goldman Sachs has lowered its 2024 earnings growth forecast for STOXX 600 companies from 6% to 2%, citing risks from rising corporate taxes and the potential introduction of trade tariffs, which could reduce earnings by up to 9 percentage points by 2026.

In this uncertain environment, investors need to closely monitor market developments and international trade policies to make appropriate investment decisions.