2026.07.0809:17:12UTC+00IBEX 35 Plunges After Trump’s Criticism, Middle East Tensions

Spain’s IBEX 35 index fell more than 2.5% to 19,095 points on Wednesday after US President Donald Trump sharply criticized Spain as a “terrible partner in NATO,” alleging that the country “doesn’t pay” or participate adequately. He added that he did not want “anything to do with Spain” and called for cutting off all trade, including visits, asserting that Spain would ultimately return to the table to negotiate.

In response, the Spanish government told El País that it remains committed to maintaining a strong relationship with the United States and is taking Trump’s comments “calmly.”

The market sell-off was also driven by mounting tensions in the Middle East, which pushed oil prices higher, stoked inflation fears, and strengthened expectations of further interest-rate hikes by the European Central Bank, darkening the euro area’s economic outlook. Brent crude rose to a two-week high after renewed US-Iran strikes, with Trump declaring that the Iran ceasefire was “over.” Money markets are now pricing in more than 30 basis points of additional ECB tightening this year, implying at least one more rate increase, potentially as early as September.