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The Spain IBEX 35 index IBEX, +1.47% fell Tuesday after news the ruling Socialist Party has reached a pact with the left wing Unidos Podemos party. It comes two days after a general election left Prime Minister Pedro Sánchez's Socialists without enough votes to form a government. The new coalition will still need the support of regional and other leftist groups, which some say won't be easy. The coalition between these parties may make it tough for Spain to achieve its debt targets, said Javier Rivas, financial analyst and professor at EAE Business School in Madrid, in a note. "When the economy slows down, it will be necessary to take supportive fiscal measures. Although we still don't know the details of the pre-agreement between the PSOE and Podemos, in any case, it will make these decisions very complex and this will affect all areas."