European shares ended lower on Tuesday, dragged down by heavyweight financial and healthcare stocks as investors awaited news on a potential U.S-EU trade deal while assessing the latest U.S. inflation data.
The pan-European STOXX 600 index (.STOXX) closed down 0.4%. Most regional indexes declined, with Spain's IBEX (.IBEX) falling 1.1%.
On Monday, the European Union accused the U.S. of resisting a trade deal and warned of countermeasures if no agreement is reached. U.S. President Donald Trump, meanwhile, said he was open to talks, adding that EU officials would visit the U.S. for trade negotiations.
"What we're seeing here is just a reflection of uncertainty surrounding EU-U.S. trade talks," said Fiona Cincotta, senior market analyst at City Index.
"That radio silence is just unnerving investors. They want to know that an improvement can be made on (the) 30% (tariff rate)."
Across the Atlantic, big banks kicked off the earnings season, with investors closely assessing outlooks and tariff-related uncertainties. JPMorgan Chase (JPM.N) raised its 2025 net interest income forecast and beat second-quarter profit estimates.
In the euro zone, the banking index (.SX7E) slipped 1.1%. Germany's Commerzbank (CBKG.DE), Italy's Banco BPM (BAMI.MI) and France's Societe Generale (SOGN.PA) each fell more than 2%.
Healthcare (.SXDP) also lagged, with Danish drugmaker Novo Nordisk (NOVOb.CO) sliding 2.3%.
Ericsson (ERICb.ST) reported upbeat results but the Swedish telecom equipment maker's shares declined 7.7% after it warned of tariffs crimping its margin growth.
Barratt Redrow (BTRW.L) slid 9.4% after Britain's largest homebuilder reported that home completions missed expectations for fiscal 2025.
UK's B&M (BMEB.L) slumped 9.1% to a more-than-five-year low, after the discount retailer reported higher like-for-like revenue in its domestic business in the first quarter.
Curbing losses in the sector, the biggest supplier of computer chip-making equipment ASML (ASML.AS) climbed 2.7% ahead of its earnings on Wednesday.
News on Tuesday that U.S. consumer prices increased by the most in five months in June suggested tariffs were starting to fuel inflation, potentially keeping the Federal Reserve on the sidelines until September.
Among other stocks, Orsted (ORSTED.CO) gained 8.3% after Morgan Stanley raised its rating on the Danish offshore wind developer to "overweight" from "equal weight".
