European stocks start May on dour note as Trump threatens China

European stocks declined on Monday as investors returned from a May Day break to a fresh spat between the United States and China over the coronavirus crisis that triggered sharp declines in cyclical sectors.

The pan-European STOXX 600 fell 2.3% in a downbeat start to the month, after the index recorded a 6% gain in April. Euro zone shares .STOXXE were down 3%.

Sectors sensitive to economic growth, including oil and gas .SXEP, automakers .SXAP and banking .SX7P, were the biggest drags, falling as much as 5%.

Germany’s ThyssenKrupp slumped 16.4% after its management board told staff in a letter that the pandemic could cause a new financial squeeze despite the sale of its elevator business.

Most euro zone markets also felt the pressure from a weak Wall Street session on Friday following U.S. President Donald Trump’s threat to slap new tariffs on China over the COVID-19 pandemic.