Portugal's Stock Market Surges as Global Trade Wars Shake Europe

Portugal's stock exchange continued to outperform its European peers during trading hours on February 24, 2026, rising 0.32% to 9,120.08 points even as fresh trade war threats from the United States cast a shadow over global markets. The PSI index remained one of the few bright spots on an otherwise gloomy continental trading day, sustaining the momentum that saw it reach a near 18-year high of 9,142.99 points on February 18.

Why This Matters for Portugal

• Market instability ahead: Trump's 15% global tariff announcement signals renewed volatility for portfolios with European equity exposure.

• Portuguese exporters face immediate pressure: Textiles, footwear, wine, and cork products—key sectors accounting for roughly 8% of Portugal's U.S. exports—now face cost pressures that may tighten margins or require price increases for American buyers.

• Precious metals surge: Gold and silver prices are climbing as investors seek safe havens—gold at $5,128 per ounce, silver at $86.

• German economic pulse: The Ifo business climate index rose to 88.6 points in February 2026, the strongest reading since August 2025, offering a glimmer of optimism for Portugal's largest eurozone trade partner.

The Tariff Whiplash Gripping Global Markets

The trigger for February 24 market jitters came over the weekend. After the U.S. Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act on February 20, ruling President Trump had exceeded his constitutional authority, the administration pivoted within hours. Trump invoked Section 122 of the Trade Act of 1974, a rarely-used statute that effectively bypasses normal congressional procedures, to impose new 15% duties on all imports effective immediately on February 24.

This legislative maneuver effectively nullifies the Court's rebuke. While the ruling opens the door to $100B to $175B in refunds for businesses that paid the invalidated levies, those reimbursements will likely take years to process. Meanwhile, the Section 122 tariffs are temporary—capped at 150 days—but renewable if Congress grants an extension. Trump has also signaled he will layer on additional duties under Section 301 (targeting unfair trade practices) and maintain existing Section 232 measures on steel and aluminum, keeping the aggregate U.S. tariff rate well above pre-2017 levels.

For exporters in Portugal and across the European Union, this creates dual pressure: the immediate 15% cost impact and legal uncertainty about which tariff regime will survive the next court challenge or congressional session.

How Lisbon Defied the Continental Selloff

While the pan-European STOXX 600 slipped 0.21% to 629.22 points, and key indexes in Frankfurt (-0.42%), London (-0.07%), and Paris (-0.05%) all traded in the red, the Portugal PSI advanced into positive territory. Only Madrid (+0.59%) and Milan (+0.58%) joined Lisbon in the green column.

This divergence reflects Portugal's relatively lower direct exposure to U.S. export markets compared to Germany's automotive sector or France's aerospace industry, both of which saw notable selling pressure. Portuguese equities—heavily weighted toward banking, utilities, and domestic-focused industrials—proved more resilient to the tariff narrative. Banks, in particular, showed strength across Southern Europe as traders anticipated that ongoing fiscal stimulus and domestic demand would cushion any external shocks.

Futures for Wall Street's major indices pointed to a downward open, reversing the gains posted Friday after news of the Supreme Court decision and a 0.4% Q4 2025 GDP growth print for the United States.

What This Means for Portuguese Residents and Businesses

Portuguese exporters in textiles, footwear, wine, and cork products face the most immediate exposure. These sectors collectively shipped roughly €800 million annually to the United States. The 15% tariff translates to €120 million in additional costs—either absorbed by producers or passed to U.S. importers, a difficult proposition in competitive markets where margins are already thin.

Currency dynamics: The euro climbed to $1.1811 against the dollar in Frankfurt trading, up from $1.1784 on February 21. A stronger euro makes Portuguese exports even more expensive for U.S. buyers, compounding the tariff burden. However, it also makes imported goods—including energy and raw materials—cheaper for Portugal-based manufacturers and consumers, providing partial offset.

Portfolio implications: Investors holding diversified European or global portfolios should brace for continued volatility in the weeks ahead. The temporary nature of the Section 122 tariffs means markets will remain sensitive to political and legal developments through mid-July 2026.

Safe-haven dynamics: Those holding gold or silver saw substantial gains. Gold rose 0.65% and silver 1.16%, with analysts forecasting that gold could breach $6,000 per ounce and silver surpass $100 if trade tensions persist. For Portuguese savers, precious metals and German bunds (yielding 2.733% on the 10-year) offer traditional shelter.

Germany's importance: Germany remains the largest single destination for Portuguese exports within the eurozone. The Ifo Institute's business climate index improved to 88.6 points in February 2026 from 87.6 in January, driven by stronger domestic demand and fiscal stimulus. This resilience supports demand for Portuguese goods, from auto parts to ceramics—a critical lifeline during global trade tensions.

German Resilience Offers a Counterweight

Amid the trade chaos, Germany's business confidence delivered encouraging news. The gauge climbed to 88.6 points in February 2026 from 87.6 in January, beating forecasts of 88.4 and marking the strongest sentiment reading in six months.

Clemens Fuest, president of the Ifo Institute, attributed the uptick to stronger domestic demand and fiscal stimulus measures rolling out across Germany. Current conditions assessments improved, as did forward-looking expectations. The manufacturing sector posted gains driven by better order books, while the services and logistics segments turned notably more optimistic.

However, Fuest cautioned that export-facing manufacturers remain anxious about trade policy uncertainty. The construction sector continued its gradual recovery, though order backlogs remain sluggish. The retail segment saw sentiment decline, reflecting consumer caution.

Commodities and Debt Markets Reflect the Flight to Safety

Brent crude oil, the European benchmark, fell 1.30% to $70.90 per barrel, down from $71.76 on February 21. The drop signals concerns that a tariff-driven slowdown will dampen energy demand, particularly in manufacturing hubs.

Precious metals moved in the opposite direction. Gold advanced toward record territory, closing at $5,128.05 per ounce, inching closer to its all-time high of $5,335.09 set on January 29, 2026. Silver climbed to $86.10. Analysts attribute the precious metals rally to central bank buying, a weaker U.S. dollar, and investor flight from equities toward assets perceived as stable.

In the bond market, the yield on Germany's 10-year government bond edged down to 2.733% from 2.737%, reflecting demand for low-risk debt. For Portuguese borrowers, this translates to relatively stable financing costs.

What European Lawmakers Are Saying

The abrupt policy shift in Washington has left European officials scrambling. Bernd Lange, chair of the European Parliament's International Trade Committee, labeled the situation "pure tariff chaos". The European Parliament postponed ratification of a pending trade agreement with the United States pending clarification on how the new duties would interact with existing frameworks.

Brussels is now under pressure to respond. Options range from formal complaints at the World Trade Organization to retaliatory tariffs on U.S. goods. Early estimates suggest the 15% tariff could shave 0.3% off EU GDP, a relatively modest but non-trivial drag, especially for export-heavy member states.

For Portugal, the direct GDP impact is expected to be smaller given the country's service-oriented economy and lower share of goods exports to the U.S. However, second-order effects through supply chains and financial market contagion could still bite.

Outlook: Buckle Up for a Bumpy 150 Days

The next five months will be a test of nerves. The Section 122 tariffs expire automatically after 150 days on July 23, 2026, unless extended by Congress—a scenario far from guaranteed given the Supreme Court's constitutional rebuke and mounting business opposition. Legal challenges to the Section 122 move are already being prepared by trade law experts who argue the statute was never intended for broad-based global tariffs.

For Portuguese businesses and investors, the prudent course is defensive diversification: reduce concentration in export-dependent sectors, consider hedges via precious metals or currency contracts, and stay alert to shifts in European fiscal and monetary policy. Trade associations are lobbying authorities for clarity on export documentation and tariff classification procedures.

The resilience of the PSI index and the uptick in German business confidence offer reasons for cautious optimism. Yet the overriding reality is that trade policy is now a source of weekly, if not daily, volatility—and that is a reality Portuguese households and businesses will need to navigate through summer 2026.