Rolls-Royce Holdings PLC (LSE:RR.) and Melrose Industries PLC (LSE:MRO, OTC:MLSPF) shares dived 7.3% and 8.8% on Monday as markets continued to reel from the announcement of US reciprocal tariffs last week.
Investors were continuing to factor in a growing probability of a US and a steep global economic slowdown into their pricing of stocks across most sectors.
Airlines have already been warning of a slowdown in transatlantic travel, which has knocked shares in the sector, with Rolls and Melrose both suppliers to the aerospace and defence industry, which was one of the worst hit on Monday.
The wider FTSE 100 was down 4.5%, including a sharp fall for British Airways owner IAG, while in Europe, falls for the defence sector saw Germany's DAX tumble 7.2% and France's CAC index lose 6.1%.
The 10% blanked baseline tariff that US President Donald Trump announced came into effect on Saturday, with those tariffs set to escalate this week as Wednesday sees the higher 'reciprocal' tariffs imposed on top.
On Thursday, China will start to impose the 34% retaliatory tariffs on US imports, which it announced on Friday.
Trump showed no sign of backing down over the weekend.
“Forget markets for a second - we have all the advantages,” Trump told media on Air Force One yesterday, adding that, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”