European Stocks Close Lower On Political Concerns, Tariff Worries

(RTTNews) - European stocks closed weak on Tuesday, weighed down by political uncertainty in France, and lingering concerns about tariffs and their impact on global economic growth.

French bonds tumbled as Prime Minister Francois Bayrou called a confidence vote for Sept. 8 over his plans for sweeping budget cuts.

Officials from France's main opposition parties said they would not back the government, raising the risk of French political instability.

Meanwhile, in the U.S., President Donald Trump took the unprecedented action of removing Federal Reserve Governor Lisa Cook, raising concerns over the Federal Reserve's independence.

Investors also reacted to a report showing France's consumer confidence weakened to the lowest level in August 2025 since October 2023 largely due to the weaker outlook for standard of living and the fall in saving intentions.

The pan European Stoxx 600 closed down 0.83%. The U.K.'s FTSE 100 ended 0.6% down, Germany's DAX drifted down 0.5%, and France's CAC 40 slid 1.7%, while Switzerland's SMI dropped 0.37%.

Among other markets in Europe, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Portugal, Spain and Sweden ended weak.

Poland and Turkiye closed higher, while Russia settled flat.

In the UK market, Kingfisher, Convatec Group, Associated British Foods and DCC lost 3.4 to 4.3%.

Diageo, Berkeley Group Holdings, Compass Group, WPP, Prudential, Schroders, Segro, Persimmon, Whitbread and Coca-Cola HBC lost 2 to 3%.

British American Tobacco closed nearly 2% down, as Chief Financial Officer Soraya Benchikh stepped down with immediate effect after about 15 months in the role.

Bunzl climbed more than 5% as the British distribution firm announced the completion of two new acquisitions in Spain and Mexico.

Fresnillo gained about 3.1%. Babcock International, BT Group, Halma, Rolls-Royce Holdings, Tesco, Ashtead Group and Endeavour Mining climbed 1 to 2.2%.

Halma gained some support after it acquired Netherlands-based advanced gyroscopic locating systems provider Brownline in a deal worth around £129m.

In Germany, Puma ended down by 5.1%. Commerzbank lost a little over 5% following a rating downgrade by Bank of America. The stock has been downgraded to "underperform" as the analyst feels the valuation is exaggerated and sees no upside potential from the current level.

Merck, Allianz, Symrise, Deutsche Post, Munich RE, Deutsche Bank, Covestro, Mercedes-Benz and Infineon closed lower by 1 to 2%.

Siemens Energy climbed 2.3%. Bayer, Sartorius and E.ON gained 1.7%, 1.5% and 1%, respectively.

In the French market, Societe Generale tumbled nearly 7%. Vinci, Credit Agricole, Edenred, Teleperformance, AXA and BNP Paribas lost 4 to 6%.

Thales, Orange, Air Liquide, TotalEnergies, Accor, Carrefour, Engie, Veolia Environmental, Eurofins Scientific, Bouygues, Pernod Ricard, Stellantis and Michelin lost 1.3 to 3.1%.

In economic news, U.K. shop price inflation accelerated to the highest since early last year in August due to higher food prices, the British Retail Consortium reported.

Shop price inflation rose to 0.9% in August from 0.7% in July. This was the highest since March last year.

The increase was driven by the annual rise in food inflation to 4.2% from 4% in July.

A report from INSEE said that the French consumer sentiment index edged down to 87 in August from 88 in July. This was the lowest reading since October 2023 and remained below its long-term average of 100.

The survey showed that assessment regarding consumers' future personal financial situation deteriorated. After three months of stability, the index dropped to -16, which was the lowest since September 2023.

Meanwhile, the one related to their past personal financial situation gained one point to -21.