Pharmaceutical companies across Europe and the U.S. are facing mounting pressure as investors react to a new wave of tariffs announced by U.S. President Donald Trump.
The Stoxx 600 Health Care Index dropped as much as 4.7% to its lowest level since October 2022 following Trump’s comments that the U.S. would soon impose a major tariff on imported pharmaceuticals.
Major drugmakers, including Novo Nordisk, AstraZeneca and GSK, were among the top decliners.
Novo Nordisk fell by 7.2% while AstraZeneca dropped 6% and GSK declined 4.9% as investors responded swiftly to the announcement with broader European markets also weakening as sentiment soured.
The uncertainty surrounding which pharmaceutical products or components may be targeted is adding to the volatility.
According to Bloomberg analysts, John Murphy and Sam Fazeli at Bloomberg Intelligence, companies with lower gross margins such as Bristol Myers Pfizer and Sanofi could experience the most adverse earnings impact if tariffs are implemented.
Investors are struggling to quantify the potential damage as product-level sourcing details are not consistently disclosed in public filings.
This lack of visibility is limiting accurate projections of which companies will face the heaviest financial strain from the proposed tariffs.
Meanwhile, bond markets are also reacting. U.S. 30-year yields surged to 5% for the first time since January, triggering a global bond selloff.
The ripple effects are being felt in the U.K. where borrowing costs have reached their highest levels since 1998. Japan’s bond market faced even sharper volatility amid global asset repricing.
In London, Chancellor Rachel Reeves is under increasing pressure as fiscal space tightens. Rising yields across the curve are squeezing financing conditions while investor appetite for risk assets continues to fade.
Back in the U.S., markets are experiencing a sharp rotation as the dollar index fell 0.7% on a trade-weighted basis and short-term dollar sentiment has weakened.
S&P 500 and NASDAQ 100 futures briefly recovered before falling again as traders absorb the implications of the latest trade actions.
Bloomberg Intelligence editors noted that even recent share price moves among pharma names may have already factored in a partial tariff impact, but broader regulatory and pricing uncertainties remain.
This adds another layer of complexity for investors attempting to forecast sector earnings in the second half of 2025.
Chinese equities moved in the opposite direction with key indexes gaining on expectations of government stimulus in response to the tariffs.
The CSI 300 Index closed up 1% and a major Hong Kong index rose 1.4% after recovering from an earlier 4% decline.
The U.S. administration’s trade stance continues to reverberate through global markets affecting everything from pharmaceutical valuations to bond yields and currency flows.
Analysts remain cautious about near-term volatility and highlight the risk of escalation should retaliatory measures follow.
