The pan-European STOXX 600 index finished 0.75% lower, with Italian stocks underperforming the most in major markets with a 1.5% decline

European shares closed at a more than one-week low on Thursday, as investors were disappointed by a series of corporate reports from the likes of Sanofi and Ferrari, while beverage makers slid as they were faced with a 15% U.S. tariff.

Earnings were in full swing in Europe this week as traders gauged the impact U.S. tariffs were likely to have on corporate performance for the rest of the year.

The pan-European STOXX 600 index finished 0.75% lower, with Italian stocks underperforming the most in major markets with a 1.5% decline.

Italian luxury carmaker Ferrari slid 11.7% – marking its biggest one-day drop since its listing nine years ago. The stock also weighed on the broader STOXX automobile sector which was down nearly 4%.

The sports-car maker maintained its annual forecasts and said that it will reduce the price compensation it introduced earlier on some cars sold in the U.S., once the U.S.-EU trade deal was effective. However, analysts mulled if the company can sustain its high profitability.

Drugmaker Sanofi also dropped 7.8% after reporting lower-than-expected earnings, but said that the impact from U.S. tariffs could be manageable.

When we think about sectors like automotives, pharma and consumer discretionary names — the risk is these sectors are particularly vulnerable to US tariffs, said Craig Cameron, portfolio manager and research analyst at Templeton Global Investments.

So we’re consciously deciding to lean away from them and focus more on utilities, industrials, and financials that are largely domestically driven and insulated from tariffs, he said.

Euro zone banks continued their upward momentum, adding 0.7% on Thursday and have significantly outperformed the broader market in July. The sector logged monthly gains of 49%, compared with the STOXX’s 7.6% rise.

The sector also got a boost on the day after Societe Generale raised its annual profit target sending its shares up 6.9%, while BBVA added 7.9% after second-quarter net profit beat expectations.