European Markets Tread Cautiously Amid U.S. Trade Woes and ECB Rate Adjustments

European shares witnessed slight declines as the ECB adjusted interest rates and investors assessed corporate earnings amid U.S. trade tensions. The STOXX 600 index closed marginally lower, reflecting concerns over tariffs, European profitability forecasts, and insights from U.S. Federal Reserve Chair Jerome Powell on slowing economic growth.

European markets ended slightly lower on Thursday following the European Central Bank's seventh rate cut in a year, as the institution aimed to boost confidence in a strained economy. Investors remained cautious, digesting the impact of unpredictable U.S. trade policies on corporate earnings.

The STOXX 600 index dropped 0.1%, although it reported a weekly rise of over 4% in a shortened week. Concerns over tariffs led analysts to reduce their expectations for European corporate profitability, evoking market volatility comparable to the initial phase of COVID-19.

Despite the downward trend, energy stocks surged by 1.6% thanks to increased crude oil prices, with Siemens Energy's stocks spiking by 10.5%. The firm upgraded its fiscal outlook, while Rentokil Initial reported a 2% organic revenue growth for the first quarter.

(With inputs from agencies.)