Concerns over tariffs have led to a decline in the valuations of healthcare stocks in the European Union

Healthcare stocks are becoming a drag on the European stock market, with a range of different risks reflected in their price valuations, and these stocks are becoming increasingly cheap. This sector is exerting pressure on the overall performance of the Stoxx 600 index, causing the index to give back most of its gains for the day. Swiss companies have performed poorly, with Novartis and Roche seeing declines in their stock prices. The long-term uncertainty surrounding U.S. tariffs continues to put pressure on the industry—just yesterday, President Trump hinted at the possibility of raising tariff rates to 250%. The situation is particularly severe for the Swiss stock market, as the country is engaged in a separate tariff battle with the U.S. Efforts within the U.S. to lower drug prices have also had an adverse effect. Additionally, the uncertainty surrounding U.S. healthcare policy must be considered, with officials recently cutting funding for mRNA vaccines as the latest example. These concerns are increasingly reflected in industry valuations. A year ago, the Stoxx 600 healthcare index had a significant premium relative to other components of the benchmark index. Now, the index is in a discounted state. This discount has recently widened, and last week's sharp decline in the stock price of Danish company Novo Nordisk has exacerbated the situation