Global Markets React: Stocks Dip, Gold Surges on New Tariff Threats

(Bloomberg) — Risk assets slipped and haven demand strengthened after US President Donald Trump proposed new levies on eight European countries, reviving tariff-related worries across markets. The dollar fell. US equity-index futures slumped as trading started on Monday, with contracts for the Nasdaq 100 retreating as much as 1%. Gold hit a record of over $4,680 an ounce and silver surged around 4% to an all-time high. Brent crude declined almost 1%. Treasury futures gained, while the dollar weakened against all its Group-of-10 peers, losing the most against the Swiss Franc and the Japanese yen. Stocks in Australia and Japan fell with cryptocurrencies, such as Bitcoin, also declining. The return of tariff concerns comes as risk appetite has been underpinned by strong earnings and heavy investment linked to artificial intelligence. That presents a fresh test for stock markets, which have climbed to record highs on the AI-led rally after rebounding from the selloff triggered by Trump’s century-high levies. “The immediate market reaction is likely to be a classic uncertainty shock,” said Shoki Omori, chief desk strategist at Mizuho Securities Co. in Tokyo. “It’s a clear signal that tariffs are being redefined as a geopolitical weapon rather than an economic negotiating tool. The point is not the initial 10%. The point is that nothing is ring-fenced anymore.” Trump said over the weekend he’d impose a 10% tariff on goods from eight European countries starting Feb. 1, rising to 25% in June unless there’s a deal for a “purchase of Greenland.” The move drew quick rebukes from European leaders, who are now poised to halt the approval of the trade agreement struck last year. Bloomberg reported that French President Emmanuel Macron may request the activation of the EU’s anti-coercion instrument – the bloc’s most powerful retaliation tool. “The outcome of these new trade tensions is unclear, but what has long been evident is that there is no such thing as trade or tariff certainty anymore,” analysts including Carsten Brzeski, global head of macro at ING Bank, wrote in a note to clients. “What is clear is that a full-blown trade war between the EU and the US would leave only losers.” Asian assets were already facing pressure after US stocks on Friday gave up an earlier gain to close 0.1% lower, after Trump suggested he’d nominate someone other than Kevin Hassett to succeed Federal Reserve Chair Jerome Powell. Treasuries slid across the curve as traders dialed back expectations for rate cuts, with odds lifted that former Fed Governor Kevin Warsh will be nominated to lead the Fed. Early focus in Asia will also be on Chinese data, which may show the economy remained sanguine in the fourth quarter and likely capped 2025 with its weakest quarterly growth in three years. Gross domestic product is expected to gain 4.5% year-on-year in the three months to Dec. 31, slower than the 4.8% in the prior quarter, according to a Bloomberg survey. Eyes will then shift to the European open, with the region’s equities likely to bear the brunt of any selloff, according to strategists. Deutsche Bank anticipates the fallout on the euro may ultimately be limited given the US relies on Europe for capital, while others see Trump’s salvo purely as a negotiating tactic to gain leverage ahead of the World Economic Forum at Davos this week. “My working assumption is that an ‘off ramp’ from these threats will soon be found, and that this turns into yet another ‘TACO moment’,” Michael Brown, a strategist at Pepperstone Group in London, wrote in a note to clients. “With the fundamental bull case for risk still a resilient one, and providing that any European retaliation remains largely rhetorical, I would view equity dips as buying opportunities for now and wouldn’t be surprised to see the week’s initial FX moves fade relatively rapidly.” Some of the main moves in markets: Stocks S&P 500 futures fell 0.7% as of 9:02 a.m. Tokyo time Hang Seng futures fell 0.7% Japan’s Topix fell 0.9% Australia’s S&P/ASX 200 fell 0.2% Euro Stoxx 50 futures fell 0.5% Currencies The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1620 The Japanese yen rose 0.3% to 157.61 per dollar The offshore yuan was little changed at 6.9610 per dollar The Australian dollar was little changed at $0.6686 Cryptocurrencies Bitcoin fell 2.7% to $92,819.1 Ether fell 2.8% to $3,246.34 Bonds Australia’s 10-year yield advanced three basis points to 4.74% Commodities West Texas Intermediate crude fell 0.7% to $59.01 a barrel Spot gold rose 1.6% to $4,671.34 an ounce This story was produced with the assistance of Bloomberg Automation. –With assistance from Ruth Carson. ©2026 Bloomberg L.P.