The economic slowdown in the Eurozone and the UK has sparked market concerns, leading to all three major European stock markets closing in the red on May 22nd, 2025.

Taiwan • Business • 05/22 18:18
The economic slowdown in the Eurozone and the UK has sparked market concerns, leading to all three major European stock markets closing in the red on May 22nd, 2025.

On May 22, 2025, the major European stock markets fell as investors worried about the economic slowdown in the Eurozone and the UK. The Eurozone's PMI for May dropped to 49.5, marking the first contraction in the services sector since November 2024. The FTSE 100 in London, the DAX in Frankfurt, and the CAC 40 in Paris fell by 0.54%, 0.51%, and 0.58%, respectively. The market was influenced by weak economic data, a worsening U.S. fiscal outlook, and global bond market volatility, resulting in cautious investor sentiment.

Key Updates

05/24 06:17

Apple's stock price has fallen for eight consecutive days, reducing its market value to the third largest in the world due to the threat of Trump's tariffs, competition in AI, and a weak Chinese market.

Apple Inc. is facing significant market challenges, as its stock price has fallen for eight consecutive days since early May, resulting in a market capitalization loss of over $390 billion, dropping it to the third largest company globally. Former U.S. President Trump has threatened to impose a 25% tariff on iPhones that are not made in the United States. Along with competitive pressure from AI and sluggish sales in the Chinese market, these three pressures are affecting Apple's future strategies and investor confidence.

05/24 02:18

U.S. defense budget expansion exceeds one trillion dollars, sparking a boom in defense stocks: Yuanta Global Aerospace and Defense Technology ETF has risen nearly 25% this year.

The U.S. defense budget has surpassed $1 trillion for the first time, approved on May 22, 2025, with an increase of approximately $150 billion, prompting a swift reaction in global markets. Taiwan's Yuanta Global Aerospace & Defense Technology ETF (00965) was affected, with its stock price reaching a new high of 17.85 USD on May 23, representing a nearly 25% increase since the start of the year. The ETF's holdings primarily consist of major U.S. and European defense contractors, directly benefiting from the budget expansion. Capital flows show active positioning by institutional investors, and international asset management firms have also launched defense-themed ETFs, indicating a growing interest in investing in the defense sector.

05/23 01:47

U.S. stock market futures remained unchanged due to the impact of rising U.S. Treasury yields on market sentiment. Updated on May 23, 2025.

On May 23, 2025, U.S. stock market futures were nearly flat as investors absorbed the surge in long-term U.S. Treasury yields. The 30-year Treasury yield reached 5.16%, and the 10-year yield surpassed 4.6%, marking their highest levels since October 2023. This increase is linked to the U.S. Congress passing tax reform and military spending bills under the Trump administration, heightening concerns about the expanding fiscal deficit, resulting in falling bond prices, rising yields, and a dampening effect on stock market performance.

05/22 23:18

BlackRock and Fidelity suggest gradual investments in U.S. stocks to navigate Trump's uncertain tariff policies.

In the spring of 2025, the US stock market showed resilience as corporate earnings exceeded expectations, but the new tariff policies of the Trump administration increased uncertainty in the global economy. BlackRock and Fidelity recommended a diversified market allocation and restructuring of supply chains to address risks. Profits for S&P 500 companies were strong, and tech stocks rebounded. The tariff policies led to supply chain restructuring and adjustments in capital expenditures, leading to increased inflation and demand for hedging. Investors should adopt asset allocation strategies that focus on defense, income, and growth while focusing on undervalued markets and industries with low policy risk.

05/22 22:48

The U.S. House of Representatives passes Trump's "Big and Beautiful" Act, with the U.S. stock market showing mixed results at the close on May 22.

On May 22, the U.S. House of Representatives passed President Trump's "big and beautiful" tax reform and spending plan with 215 votes in favor and 214 against. The plan could increase the U.S. national debt by about $2.4 trillion over the next decade. On the same day, the three major U.S. stock indices had mixed performances, with the Nasdaq index rising by 53.09 points and the Philadelphia Semiconductor Index falling by 27.24 points. The market's response to the bill's fiscal impact was varied, as investors continued to assess its potential effects, resulting in heightened market volatility.

05/22 18:18

The economic slowdown in the Eurozone and the UK has sparked market concerns, leading to all three major European stock markets closing in the red on May 22nd, 2025.

On May 22, 2025, the major European stock markets fell as investors worried about the economic slowdown in the Eurozone and the UK. The Eurozone's PMI for May dropped to 49.5, marking the first contraction in the services sector since November 2024. The FTSE 100 in London, the DAX in Frankfurt, and the CAC 40 in Paris fell by 0.54%, 0.51%, and 0.58%, respectively. The market was influenced by weak economic data, a worsening U.S. fiscal outlook, and global bond market volatility, resulting in cautious investor sentiment.

05/22 13:49

CNBC Host Jim Cramer Breaks Down the U.S. Stock Market: Thursday's Top 10 Things to Watch

On May 22, 2025, CNBC's "Mad Money" host Jim Cramer highlighted the top ten concerns in the U.S. stock market, including the setback of Trump's tax reform, changes in solar industry tax policies, layoffs at Walmart, Marvell's rating downgrade, Urban Outfitters' impressive earnings, Snowflake's earnings surpassing expectations, doubts about Alphabet's search business, Target's market share decline, VFC Corp's weak forecasts, and TJX's benefit from price advantages. These observations reflect the market's concerns about inflation, interest rates, and technological innovation.

05/22 10:19

The surge in U.S. Treasury yields triggers an asset sell-off, while stock index futures rebound during early trading on May 22, 2025.

On May 22, 2025, the yields on the U.S. 20-year and 30-year Treasury bonds exceeded 5%, raising concerns about the U.S. fiscal health and putting pressure on the stock and bond markets, as well as the dollar. The Dow Jones Industrial Average dropped more than 800 points the day before, but stock index futures showed slight stabilization in early Thursday trading. The increase in yields is linked to weak demand at the 20-year Treasury auction, the Trump administration's tax reform policies, and the expanding budget deficit, undermining market confidence in U.S. assets.

05/22 06:51

May 22, 2025, U.S. Stock Futures Market: Dow Jones down, S&P 500 up, Nasdaq 100 fluctuating (in Taipei Time)

On May 22, 2025 (Taipei time), the futures of the three major U.S. stock indices were mixed. Dow Jones Industrial Average futures stood at 41,951 points, up 4 points (+0.01%); S&P 500 futures stood at 5,870 points, up 8.75 points (+0.15%); Nasdaq 100 futures stood at 21,197.25 points, up 40.5 points (+0.19%). According to MoneyDJ data at 1:31 PM, the market stabilized in the afternoon, with the Nasdaq leading the gains. The previous day's spot market had declined across the board due to factors like the fiscal deficit, causing volatility in the futures market's early trading session.

05/22 02:50

May 22, 2025 U.S. Stock Futures Market: Dow slightly declined, S&P and Nasdaq rose slightly

On May 22, 2025, at 08:35 Taipei time, the U.S. stock futures market showed a mixed performance. Dow Jones Industrial Average futures dropped 17 points to 41,930, down 0.04%; S&P 500 futures increased by 2.25 points to 5,863.5, up 0.04%; Nasdaq 100 futures edged up 2 points to 21,158.75, up 0.01%. The previous trading day saw major U.S. stock indices generally closing lower, and the slight fluctuations in the futures market reflect investors' cautious stance on the market outlook.

Eurozone Economic Activity Contracts Again as PMI Falls Below Growth Threshold

According to data jointly released by S&P Global and Hamburg Commercial Bank (HCOB), the Eurozone's composite Purchasing Managers' Index (PMI) preliminary reading for May fell from 50.4 in April to 49.5, dropping below the 50 growth threshold, indicating an overall contraction in economic activity. This is the lowest level since November 2023 and is below the market expectation of 50.7.

The services sector was particularly weak, with the PMI dropping from 50.1 to 48.9, marking the largest decline in 16 months. Although the manufacturing PMI slightly rose to 49.4, reaching a 33-month high, it remains in contraction territory. HCOB Chief Economist Cyrus de la Rubia noted that the decline in the Eurozone's services sector is mainly due to weak domestic demand rather than external trade factors.

UK Economic Data Also Weak, Fiscal Pressure Heightens Market Anxiety

In the UK, although there was a slight recovery in service sector activity, overall business activity remained sluggish. Meanwhile, the UK government's budget deficit in April was higher than expected, highlighting the pressure on public finances. This news further dented market confidence, leading to poor performance in UK government bonds and dragging down the stock market.

Additionally, weak performance in the energy and real estate sectors was a major factor in the decline of the FTSE 100 index. Energy giants Shell and BP both saw their stock prices fall by 1.5%, while British real estate developer British Land plummeted by 5.4% due to poor financial forecasts.

Major European Stock Markets Close Lower as Investor Sentiment Turns Cautious

Against the backdrop of weak economic data and rising global uncertainty, all three major European stock markets closed lower:

  • The London FTSE 100 index fell by 47.20 points, or 0.54%, to close at 8739.26 points.
  • The Frankfurt DAX index dropped by 123.23 points, or 0.51%, to close at 23999.17 points.
  • The Paris CAC 40 index slid by 46.05 points, or 0.58%, to close at 7864.44 points.

The pan-European STOXX 600 index also fell by 0.64%, marking its largest single-day decline since early April. All major sectors recorded declines, with the personal consumer goods and automotive parts sectors experiencing the most significant drops, reflecting widespread market concerns about consumption and export prospects.

US Fiscal and Bond Market Turmoil Intensifies Pressure on Europe

In addition to poor local economic data in Europe, the deteriorating fiscal situation in the US is also putting pressure on European markets. The US House of Representatives recently passed a large-scale tax cut bill, sparking concerns about further ballooning US debt, pushing the yield on the US 10-year Treasury note to near a three-month high. Long-term government bond yields in Germany and other Eurozone countries also rose in tandem, further suppressing stock market performance.

Netwealth Chief Investment Officer Iain Barnes stated, "The market is nervous about the long-term nature of the US structural fiscal deficit, and this uncertainty is spreading to global markets."

Divergent Stock Performance Reflects Market Sentiment

In terms of individual stocks, UK chemical company Johnson Matthey saw its stock price soar over 30% after announcing the sale of its catalyst technology business to Honeywell for £1.8 billion, marking its largest single-day gain since listing and making it the best-performing component of the STOXX 600 index.

Conversely, Swedish gaming company Embracer Group saw its stock price plummet by 17% after revising its financial forecasts downward and delaying the release of AAA games, topping the list of decliners. German telecom company Freenet AG also saw its stock price drop by 16.7% due to disappointing first-quarter financial results.

Euro Under Pressure as ECB Policy Outlook Draws Attention

In the currency market, the euro is under pressure relative to the US dollar, mainly due to market expectations that the European Central Bank (ECB) may further cut interest rates in June. ECB Governing Council member and Portuguese central bank governor Mario Centeno stated that to achieve the 2% inflation target, policy rates may need to be reduced to a natural rate range of 1.5% to 2%.

Additionally, market concerns about the progress of ceasefire negotiations in the Russia-Ukraine war are also affecting the euro's performance. Although former US President Trump claimed both sides agreed to start negotiations, the lack of a specific timetable is increasing market uncertainty.

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