European Stocks Plunge Amid Soaring Bond Yields

European stocks declined sharply as government bond yields rose, driven by strong U.S. economic data and potential tariffs under Trump's presidency. The STOXX 600 dropped 0.32%, with retail stocks notably hit. Britain's bond yields reached a new high, influencing broader market declines amid light trading volumes.

European stock markets faced a second consecutive day of decline as rising government bond yields unnerved investors on Thursday. This downturn was spurred by robust U.S. economic data and concerns over impending tariffs during Donald Trump's presidency, leading traders to anticipate fewer interest rate cuts globally.

The pan-European STOXX 600 index saw a 0.32% drop in morning trading, with the retail sector at the forefront of the selloff. Economically sensitive sectors such as banks, insurers, and automakers also suffered losses, impacted by German 10-year bond yields climbing to their highest point since July.

In the UK, the bond selloff intensified as the benchmark 10-year yield hit a peak not seen since 2008. The UK's mid-cap index fell by 0.6%, reaching its lowest point in eight months. With the U.S. markets closed for a day of mourning following former President Jimmy Carter's death, trading volumes across Europe were lighter than usual.

(With inputs from agencies.)