German investor sentiment dropped in April at its sharpest rate since early 2022, according to the latest ZEW survey

Data released Tuesday by the ZEW economic research institute showed a sharp drop in German investor sentiment, with the index falling to -14 in April from 51.6 the previous month — far below expectations for a rise to 10.6.

This marks the steepest monthly decline since early 2022, when Russia’s invasion of Ukraine first rattled global markets. The drop was largely driven by heightened uncertainty surrounding new U.S. import tariff measures, which added fresh strain to already fragile economic conditions in Europe’s largest economy.

The president of ZEW noted that it’s not only the potential consequences of these reciprocal tariffs on global trade that have unnerved markets, but also the rapid shifts in their scope and scale, which have dramatically increased global economic uncertainty and darkened the outlook.

A separate report indicated a modest improvement in perceptions of the current economic situation, with the corresponding indicator rising to -81.2 in April from -87.6 in March, slightly better than the forecast of -86. However, this marginal uptick is unlikely to alter the broadly negative sentiment.