Swiss Stocks Erase Year's Gains in a Day After Trump's 39% Tariff Shock

TradingKey - The Swiss stock market faced a decline on Monday as investors reacted strongly to U.S. President Donald Trump's announcement over the weekend of a 39% tariff on Switzerland. The market index hit a low of 11,665 points during the day, almost erasing this year's gains.

Swiss Market Index; Source: Google Finance

Investors are concerned that these punitive tariffs will significantly damage the profits of Swiss companies, particularly in key sectors such as pharmaceuticals and luxury goods like watches and jewelry—industries that represent Switzerland's major exports to the United States.

Pharmaceutical giants Novartis and Roche, which make up nearly 30% of the Swiss Market Index, dropped 1.2% and 2.1%, respectively. Additionally, watch manufacturer Rolex saw its stock decline by 1.2%.

Furthermore, Bit Witman, chairman of Swiss consulting firm PortaAdvisors, analyzed that the "tariff unilateral war" initiated by the U.S. has led to an increase in global financial asset risk premiums, which not only directly impacts the exchange rate of the Swiss franc but also significantly undermines confidence in the stock market, particularly within export sectors.

The Swiss franc continued its downward trend against the euro on Monday, with intraday losses widening to 0.66%, exacerbating Friday’s drop of 0.3%.