The Stoxx 50 dropped 1% and the Stoxx 600 fell 0.3% on Wednesday, as markets weighed mixed signals on global trade. US President Trump announced a trade framework with China, highlighting upfront rare earth supplies and access for Chinese students to US universities. However, European officials are less optimistic about their own trade talks with the US, warning that negotiations could extend beyond the July 9 deadline, with only a preliminary deal possible by then. Market sentiment was also hit by a sharp decline in retail stocks. Inditex shares plunged over 4% after the company reported disappointing quarterly sales and flagged a sluggish start to the summer season, citing economic pressures. In contrast, the autos and basic resources sectors posted gains, benefiting from the US-China trade update.