European shares tumble as trade, geopolitical tensions mount

European shares dropped on Thursday, in their fourth straight session of declines, as trade optimism stemming from U.S.-China trade talks faded, while mounting geopolitical tensions led to the markets being more cautious.

The pan-European STOXX 600 was down 0.4% at 549.41 points at 0707 GMT, while most regional bourses were also in the red.

U.S. President Donald Trump said on Wednesday that he was willing to extend the deadline for trade talks but it was not likely necessary as the U.S. will send offer letters to countries in a week or so.

However, markets were a little concerned about the European Union being able to clinch a deal before Trump’s July 8 deadline – when the tariff pause expires.

Geopolitical worries added more caution to markets already navigating U.S. tariff-driven uncertainty after trade talks with China did not offer a solution to de-escalate longstanding tensions.

U.S. personnel were being moved out of the Middle East because “it could be a dangerous place” amid rising tensions with Iran, Trump said on Wednesday. In the market, travel and leisure stocks were the worst hit, down 1.7%, while industrial miners fell 1.1%. Among stocks, BE Semiconductor Industries (BESI) jumped 7.7% after raising its long-term financial targets ahead of its investor day.

Tesco gained 1.3% after Britain’s biggest food retailer’s domestic sales growth accelerated in its first quarter.