Finance

European Stocks Plunge as US Banking Fears Resurface, Triggering Worst Weekly Losses in Six Weeks

European shares plunged Friday, led by banks, on U.S. regional bank worries and company-specific news.

October 17, 2025, 9:44 AM

A tall stack of Euro coins is positioned on the right against a blurred background displaying a dark screen with "FRANKFURT" and a white downward trend chart.

A stack of Euro coins sits next to a chart showing a downward trend at the Frankfurt Stock Exchange. By Bartolomiej Pietrzyk / Shutterstock.com.

Executive Summary

European shares fell 1.5%, set for their largest drop in six weeks, due to renewed concerns over the health of U.S. regional banks.

The European banking sector experienced a 2.4% decline, with major lenders like Deutsche Bank and Barclays seeing significant drops, mirroring U.S. regional bank issues.

Novo Nordisk shares dropped 4.6% after President Donald Trump announced that the price of its weight-loss drug would be lowered through swift negotiations.

The Story So Far

European shares are experiencing a significant decline due to renewed concerns over the health of U.S. regional banks, stemming from investor apprehension about potential undisclosed credit stress, which is impacting financial institutions globally. This market unease is compounded by specific company developments, such as Novo Nordisk’s share drop following President Donald Trump’s statement about lowering the price of its best-selling weight-loss drug, and BBVA’s share increase after its hostile takeover bid for Sabadell failed, leading to BBVA resuming shareholder remuneration.

Why This Matters

Renewed concerns over the health of U.S. regional banks are creating a ripple effect across global financial markets, leading to significant declines in European banking shares and signaling potential broader instability. Concurrently, political statements, such as Donald Trump’s remarks on drug pricing, can directly impact the valuation of major pharmaceutical companies like Novo Nordisk, while specific corporate M&A activities continue to drive independent stock movements within the European market.

Who Thinks What?

European shares and the banking sector declined significantly due to renewed concerns over the health of U.S. regional banks and potential undisclosed credit stress.

Donald Trump stated that the price of Novo Nordisk’s best-selling weight-loss drug would be lowered, with negotiations proceeding swiftly.

BBVA’s share price increased after its hostile takeover bid for Sabadell failed, as the lender announced it would immediately resume shareholder remuneration.

European shares experienced a notable decline on Friday, poised for their most significant drop in six weeks, as renewed concerns over the health of U.S. regional banks impacted financial institutions globally. The continent-wide STOXX 600 index fell 1.5% by 0714 GMT, threatening to erase its weekly gains amid the broader market unease.

Banking Sector Downturn

The European banking sector, represented by the STOXX 600 Banks index, slid 2.4%, with major lenders like Deutsche Bank, Barclays, and BNP Paribas registering leading declines. This downturn mirrored a 6.3% drop in the U.S. regional banks index on Thursday, following announcements from two unnamed lenders that fueled investor apprehension about potential undisclosed credit stress.

Company-Specific Movements

In company-specific news, Danish drugmaker Novo Nordisk saw its shares fall 4.6%. This occurred after President Donald Trump stated that the price of the company’s best-selling weight-loss drug would be lowered, indicating that negotiations over these price adjustments would proceed swiftly.

Meanwhile, Spain’s BBVA experienced a 7% increase in its share price. This rise followed the lender’s unsuccessful attempt to secure shareholder backing for its 16.32 billion euro ($19.07 billion) hostile takeover bid for Sabadell. BBVA announced it would immediately resume shareholder remuneration, while Sabadell’s shares declined by 7%.

Market Summary

The day’s trading reflected a complex interplay of systemic banking concerns originating from the U.S., alongside distinct corporate developments and political statements impacting specific industries across Europe.