IBEX 35 Hits New Five-Year High, Shaking Off Tariff Fears

Spain’s IBEX 35 has surged to its highest level in more than five years, trading around 13,660 points on the morning of today (12 May), as investors brushed aside April concerns over renewed US tariffs.

The index had briefly slipped in early April — falling around 12% from roughly 13,336 points on 2 April to a low near 11,750 by 7 April — after US President Donald Trump used what he called “Liberation Day” to unveil plans for sweeping tariffs on several trading partners, including the European Union.

Sentiment has since recovered, as Trump paused those measures in mid-April under a temporary truce with Brussels. And now he has just announced a preliminary trade agreement with China following closed-door talks in Switzerland.

Meanwhile, the IBEX 35 has risen from 11,750 on 7 April to around 13,660 early today, a 16.2% gain in just over a month. The index is now back at levels last seen in February 2008, just around the time the global financial crisis erupted.

IBEX 35: Second-Best Performing EU Index YTD

IBEX 35 is currently one of the best-performing equity indices in the EU. The benchmark has gained 17.8% year to date (YTD), second only to Germany’s DAX, which leads with an advance of around 19.2%.

Italy’s FTSE MIB follows in third place, also posting a substantial double-digit gain (+16.6%). By contrast, the Euro Stoxx 50 is up 10.6% YTD, trailing the bloc’s top performers.

France’s CAC 40 has been one of the laggards, rising just 5.6% so far this year. In global terms, EU markets outperform the S&P 500, which is down roughly 3.6% YTD.

Can It Break Its 2007 Record?

The IBEX 35 remains well below its all-time closing high of 15,945 points, reached on 8 November 2007. As of today, with the index trading around 13,660, it would need to rise another 2,285 points — a gain of roughly 16.7% — to match that peak.

That distance is narrowing, however. The index has already climbed nearly 2,000 points since the start of 2025, when it stood at about 11,650. Momentum is on the upside, but whether it can carry the IBEX past its historic ceiling remains uncertain.

There are several issues impacting the markets, such as central bank policy shifts, or what the result of US-China trade talks finally is. Nevertheless, the last time the IBEX traded near those levels, the 2008 crash wiped out close to 40% of its value. (Source: RTVE)

Spanish Banks Power the Rally?

Spanish banks have been among the top IBEX 35 performers YTD, with Santander [SAN.E] up 52.8%, followed by Bankinter [BKT.E] with a 44.8% gain, and BBVA [BBVA.E], which has risen 38% since January and as of time of writing.

The strong performance has been underpinned by robust earnings. Santander reported a 2024 net profit of EUR 12.57bn, a 14% increase year on year. Bankinter posted a record EUR 953m, up 13%, while BBVA delivered EUR 10.05bn, marking a 25% jump from 2023.

BBVA’s year has also been marked by its proposed takeover of Banco Sabadell. The bid has already secured approval from Spain’s competition authority, CNMC, and is now awaiting government review.

Conclusion

The IBEX 35’s rally reflects a combination of strong domestic earnings, easing tariff fears, and renewed confidence in European equities. Banks have led the charge, with Santander, Bankinter and BBVA all posting standout gains.

Despite the momentum, the index remains below its 2007 historic peak. Will it be able to overcome that psychological barrier this year?

*Past performance does not reflect future results.