European stocks extend losses after worst session in 8 months; banks fall 5.8% as tariffs roil markets

European stock markets continued to move lower at the open on Friday, with investors still reeling from the scale of U.S. tariffs announced this week.

The regional Stoxx 600 index was down 1.7% at 9:05 a.m. in London, with the banking sector down another 5.8% after Thursday’s 5.53% plunge.

The Stoxx 600 closed 2.57% lower on Thursday, as the world digested the steep duties slapped by U.S. President Donald Trump on more than 180 countries, bringing fears of a global trade war to a boiling point.

Among the hardest-hit sectors on Thursday was retail, with the Stoxx Luxury 10 index down 5.2% in its worst session for nearly four years. Shares of shipping giants Maersk and Hapag-Lloyd, bellwethers for the health of the global economy, both fell more than 9%.

The sweeping tariffs were particularly severe on export-reliant, developing economies in Asia which produce garments and other consumer goods for the rest of the world. Trump’s 25% tariffs on imported vehicles to the U.S. also took effect this week, joining his duties on steel and aluminum.

The euro saw strong gains against the U.S. dollar on the news, hitting a six-month high, though dipped 0.2% Friday morning.

Economists are still scrambling to assess the scale of the fallout, which will depend on how long tariffs remain in their existing form and on how other nations retaliate.

The European Union on Thursday said it would prepare countermeasures against the U.S. if negotiations fail.

French President Emmanuel Macron urged French companies to pause planned investments in the U.S., and acting German economy minister Robert Habeck said Trump would “buckle under pressure” if Europe bands together in its response.

The EU was hit with tariffs of 20%, the U.K. of 10%, Norway of 15%, and Switzerland of 31%.

Economists at Goldman Sachs said in a Friday note that while the U.K.’s tariffs were lower than the others, they were nonetheless higher than expected, leading to a lower growth forecast for the British economy, down from 0.8% to 0.7% this year. The investment bank also trimmed its growth outlooks for Switzerland, Sweden and Norway.