Global Markets React: Trump's New Tariffs Send Stock Futures Lower

(Bloomberg) — European and US stock futures fell and haven assets such as gold rallied after President Donald Trump proposed new levies on eight countries that have opposed his plans to acquire Greenland. The dollar weakened against most of its major peers. European equity-index futures dropped 1.3% and S&P 500 contracts declined 0.9% as tariff-related concerns weighed on markets. Asian shares pared earlier losses to trade flat, while South Korea — a bellwether for artificial intelligence investment — gained 1.3%. Demand for havens pushed gold up 1.6% to $4,670 an ounce and silver 3.4% higher, with both metals hitting record highs. Bitcoin and other cryptocurrencies retreated. The euro reversed early losses to trade higher, while Treasury futures gained along with German and French bond futures. There will be no cash trading in Treasuries due to a holiday in the US on Monday. Tariff concerns are resurfacing at a time when risk appetite has been underpinned by resilient corporate earnings and sustained investment linked to artificial intelligence. Trump’s latest threats pose a fresh test for stock markets, which have climbed to record highs on an AI-led rally after rebounding from the April selloff triggered by century-high US levies. “The threat of tariffs against fellow NATO members adds a fresh dose of uncertainty to the international trade picture, keeping financial markets off balance,” said Tim Waterer, chief market analyst at KCM Trade. “Traders are taking a cautious stance, at least until we see how things play out this week.” Trump on Saturday announced a 10% tariff as of Feb. 1 on goods from European countries that have rallied to support Greenland in the face of US threats to seize the semi-autonomous Danish territory. He said the levies would increase to 25% in June unless and until “a Deal is reached for the Complete and Total purchase of Greenland.” The tariffs will apply to Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland. 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.” Trump’s threats raise the possibility of European governments trimming their holdings of US assets, supporting the euro, according to George Saravelos, Deutsche Bank’s global head of FX research. Europe is the US’s largest lender with its countries owning $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined. What Bloomberg’s Strategists Say… Asian equities are down on Monday but far from out, underscoring the theme that the region offers greater resilience than peers to shocks during Donald Trump’s second presidency. That’s been driven partly by the US leader’s surprising willingness to inflict at least as much pain on his allies in Europe as on China, but also by the way Asia is seen benefiting strongly from the AI boom. — Garfield Reynolds, MLIV Asia Team Leader. For full analysis, click here. Meanwhile, China’s gross domestic product rose 5%, according to data released by the National Bureau of Statistics on Monday, confirming an estimate given by President Xi Jinping in a speech on New Year’s Eve and matching the expansion in 2024. Chinese gauges fluctuated even after the country’s economic growth met the government’s target. Traders were also watching Japan, where Prime Minister Sanae Takaichi is set to lay out her plans at a press conference later Monday for an election expected to be held as soon as Feb. 8. The yield on 30-year debt climbed 10 basis points to 3.58%, its highest level since its debut, while rates on 10- and 20-year notes rose to their highest levels since 1999. Attention later will shift to the European open, with the region’s equities likely to bear the brunt of any selloff, according to strategists. While Trump’s threats have reignited the ‘Sell America’ trade, traders anticipate a quick rebound could support the dollar, according to David Forrester, a senior strategist at Credit Agricole in Singapore. “The market will also be looking for the ‘TACO trade’ as Trump could be using the threat of tariffs as a negotiating ploy,” Forrester said, referring to a pattern of Trump threatening first and backing down later — a strategy some analysts refer to as TACO, or “Trump Always Chickens Out.” Corporate News: Nvidia Corp. supplier Micron Technology Inc. said an ongoing memory chip shortage has accelerated over the past quarter and reiterated that the crunch will last beyond this year due to a surge in demand for high-end semiconductors required for AI infrastructure. Apple Inc. retook the top spot in China after iPhone shipments jumped 28% during the holiday quarter despite a worsening shortage of vital memory chips, according to Counterpoint Research. Tesla Inc. Chief Executive Officer Elon Musk said the electric carmaker will resume work on the Dojo3 project after making progress on the design of its AI5 chip. Some of the main moves in markets: Stocks S&P 500 futures fell 0.9% as of 3:03 p.m. Tokyo time S&P/ASX 200 futures fell 0.4% Japan’s Topix fell 0.1% Hong Kong’s Hang Seng fell 1% The Shanghai Composite rose 0.1% Euro Stoxx 50 futures fell 1.3% Currencies The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.3% to $1.1628 The Japanese yen rose 0.1% to 157.90 per dollar The offshore yuan rose 0.1% to 6.9591 per dollar Cryptocurrencies Bitcoin fell 3% to $92,502.43 Ether fell 4.1% to $3,203.68 Bonds Japan’s 10-year yield advanced 8.5 basis points to 2.270% Australia’s 10-year yield advanced three basis points to 4.74% Commodities West Texas Intermediate crude fell 0.1% to $59.37 a barrel Spot gold rose 1.6% to $4,668.98 an ounce This story was produced with the assistance of Bloomberg Automation. –With assistance from Winnie Hsu, Matthew Burgess, Ruth Carson and Yihui Xie. ©2026 Bloomberg L.P.