IBEX Stalls Its Rally as Tariff Uncertainty Looms

After hitting its highest level since May 22 in the previous session, Spain's IBEX 35 opened Thursday with a slight downward bias, as investors kept a close eye on the shifting tariff landscape under U.S. President Donald Trump.

Mirroring other global markets, the Spanish stock index had been buoyed by the record-breaking surge in U.S. tech giant Nvidia--whose market capitalization briefly topped $4 trillion--and by hopes that key U.S. trading partners could negotiate to avoid the worst-case scenarios of a trade war.

On Wednesday, Trump announced 50% tariffs on copper and on Brazil, while continuing to send letters to countries outlining import levies set to take effect from August 1, according to Renta 4's morning report.

"However, on Wednesday these letters were sent to countries of lesser relevance in terms of trade volume. Meanwhile, markets remain complacent amid expectations of forthcoming trade agreements with more significant partners (the EU and India)," the analysts explained. "Additionally, countries such as the Philippines and Japan have signaled their intent to keep negotiating, maintaining hopes for a deal that could break the current deadlock."

Nonetheless, a correction due to profit-taking cannot be ruled out after the bullish run since June 19, which has seen the IBEX climb 500 points. On Wednesday, the Spanish index rose 1.24%, driven by strength in Indra--boosted by increased European defense spending--and the banking sector.

On Thursday, the only major macroeconomic reference will be the weekly U.S. unemployment claims (due at 1230 GMT), which are expected to remain steady at around 235,000, similar to the previous week.

As of 0716 GMT on Thursday, the IBEX 35 was down 33.30 points, or 0.23%, at 14,221.10, while the pan-European blue-chip index FTSE Eurofirst 300 advanced 0.40%.

In the banking sector, Santander lost 1.14%, BBVA slipped 0.18%, Caixabank dropped 0.85%, Sabadell edged up 0.03%, Bankinter was down 0.13%, and Unicaja Banco declined 0.28%.

Among the major non-financial stocks, Telefónica fell 0.29%, Inditex gained 0.37%, Iberdrola was down 0.03%, Cellnex rose 0.49%, and oil company Repsol advanced 0.31%.

(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)