(Bloomberg) -- European stocks tumbled, dropping to the lowest since January 2024 on the back of Donald Trump’s tariff announcements.

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The Stoxx Europe 600 Index sank as much as 6.5%, extending losses after its biggest weekly decline since March 2020. The gauge was trading 5.6% lower as of 10:00 a.m. in London, marking a level last seen at the beginning of 2024. The DAX was 6.1% lower after plunging as much as 10%.

Sweden’s OMX Stockholm 30 Index was down 6.1%, putting it on track for a bear market. Indexes in Italy, France, Switzerland and Germany slid into correction territory last week.

Defense stocks, one of the best-performing industry groups this year, led the drop as investors built cash by selling winners. Rheinmetall AG lost 10% and Hensoldt AG tumbled 12%.

All 20 sectors in the Stoxx 600 fell, with bank, energy and insurance shares among the biggest decliners.

“There’s just a general sense of panic,” said Daniel Murray, Zurich-based chief executive officer of EFG Asset Management. “Everything is getting killed, even good companies that will likely fare relatively well.”

The Stoxx 600 tumbled Friday to cap the heaviest weekly losses since the start of the pandemic, taking the market into a correction on concerns that the escalating trade war will hurt economic growth and curb consumer demand.

April has brought an abrupt turnaround after European equities rallied in the first quarter over optimism that fiscal reforms in Germany would boost economic growth. Light positioning, cheaper valuations and lower interest rates also helped the region outperform the S&P 500 by the most on record on a quarterly basis.

But Trump’s tariff announcements were more severe than expected, sending investors fleeing equities globally. The S&P 500 saw its biggest two-day plunge since March 2020, with the selloff slashing more than $5 trillion off the market’s value. The Nasdaq 100 entered a bear market.

Strategists are increasingly recommending investors avoid economically-sensitive shares such as energy, and instead favor loading up on defensive sectors such as telecoms and utilities.

A team at Morgan Stanley last week said the uncertainty from tariffs will pressure earnings even if negotiations ultimately water down the initial announcements, due to delays to investment decisions, hiring, M&A and a consumer slowdown.

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Investors will be monitoring the European Union’s response to the tariff announcements as the week kicks off. Finance ministers from Italy and Spain cautioned against too aggressive a response, while their counterpart in France said the bloc’s response could include regulating the use of data by American big tech groups.

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