Trump Tariff Threat to Weigh Risk Sentiment, European Stocks
Photographer: Aaron Schwartz/Bloomberg
(Bloomberg) — US President Donald Trump’s announcement of new tariffs on eight European countries over Greenland weighed risk sentiment as trading kicked off on Monday, with the region’s equities facing the brunt of any selloff.
Most major currencies were quoted weaker against the dollar in early trading, with the euro and pound sterling leading declines among Group-of-10 peers. The yen and Swiss franc were indicated slightly stronger as traders sought haven assets.
Most Read from Bloomberg
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 announcement drew a quick rebuke from European leaders including French President Emmanuel Macron, who intends to request the activation of the European Union’s anti-coercion instrument — the bloc’s most powerful retaliatory tool. European Union lawmakers are also poised to halt approval of the trade deal with the US that was struck last year, setting a 15% US tariff for most EU goods.
“In the near term, any surprise escalation via tariffs on Europe could trigger a classic risk-off episode, especially after a strong start to the year supported by constructive sentiment,” said Florian Ielpo, head of macro research at Lombard Odier Asset Management. “In that scenario, government bonds could benefit, quality assets would likely outperform, and gold could catch a bid,” he added.
The impact is likely to be on equities in the short-term and less obvious for bonds and currencies, according to Vincent Mortier, chief investment officer at Amundi SA. The US holiday on Monday also suggests thinner market conditions and no Treasury cash trade overnight.
The fallout from the news “could have some negative impact on European growth prospects but most probably on a very limited scale,” Mortier said. “Longer term, that could be a positive catalyst for Europe to accelerate its strategic autonomy agenda and form new alliances.”
Trump’s tariff threat could prove an unwelcome interruption to the rally in European equities, which have outperformed their US peers as investors poured into various regional sectors from defense to miners and chip-equipment makers. The region’s outlook has been boosted by increased German fiscal spending, lower interest rates and expectations of improving profits.
Since the start of 2025, the Stoxx Europe 600 has climbed 36% in dollar terms, double the S&P 500’s gains over the same period. The European benchmark now trades at nearly 16 times forward earnings, above its average over the past 15 years and narrowing its discount to US peers to about 30%.
“The year had started pretty well across financial markets but this new situation may trigger some profit taking,” said Vincent Juvyns, chief investment strategist at ING in Brussels. “If one looks strictly at the raised tariffs, it’s something that economically could be absorbed but the possibility of a break within the Western world would have consequences that I fail to measure the scale of.”
Citigroup Inc. strategists led by Beata Manthey have previously estimated that a 10% tariff on Europe should result in a 2 to 3 percentage-point drag on European earnings-per-share growth.
The picture is worse for those most exposed to the US levies. A Goldman Sachs Group Inc. basket of exposed companies including shipping firm A.P. Moller – Maersk A/S, carmaker BMW AG and electrical-equipment maker Legrand SA was barely changed last year while the Stoxx 600 rallied 17%.
Luxury goods, carmakers as well as miners were among sectors that came under pressure after Trump’s “Liberation Day” in April. Stocks exposed to international value chains, such as consumer discretionary and everyday goods, could also be impacted.
Still, any reaction might be short-lived until there’s more clarity on the situation. Defense stocks could also rally, said ING’s Juvyns, limiting the scope of a selloff.
“The fact that this threat was on social media instead of distilled into an executive order and it has a delayed implementation means a lot of investors might just decide to wait things out before overreacting,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
That could prove the case especially for the euro, with Deutsche Bank AG predicting a limited fallout for the regional currency, in part because of how much the US relies on Europe for capital. The tariffs could also be a catalyst for greater EU political cohesion, further meaning any negative fallout on the euro against the dollar may not be sustained this week.
“From our perspective the key thing to watch over the next few days will be whether the EU decides to activate its anti-coercion instrument by putting measures that impact capital markets on the table,” George Saravelos, Deutsche’s global head of FX research, wrote in a note to clients. “It is a weaponization of capital rather than trade flows that would by far be the most disruptive to markets.”
–With assistance from Simon Kennedy, Macarena Muñoz and Ruth Carson.
(Image credit: Getty Images) Stocks tumbled at the open Thursday as oil prices resumed their uptrend after Iran’s new supreme leader, Mojtaba Khamenei, said the Strait of Hormuz, which sees roughly a fifth of global oil pass through it on a daily basis, will remain closed in order “to pressure” the United States. Even after
Many see bitcoin BTC$71.329,00 as a safe-haven and store-of-value asset, like gold. But some currency traders treat it as a lead indicator for broader market mood, and they’ve been proven right again: Before finding stability near $70,000 recently, bitcoin plunged sharply, presaging the ongoing global stock market swoon. Bitcoin’s price peaked above $126,000 in early
Sinopec (00386) fell more than 4% again. As of the time of writing, it dropped 3.61%, trading at HKD 4.8 with a turnover of HKD 8.67 billion. According to Zhitong Finance, Sinopec (00386) fell more than 4% again. As of the time of writing, it dropped 3.61%, trading at HKD 4.8 with a turnover of
On March 13, it was reported that Hong Kong-listed fertilizer stocks continued their recent upward trend. As of the time of writing,$KO YO GROUP (00827.HK)$up nearly 8%,$SINOFERT (00297.HK)$Surging over 5%,$CHINA BLUECHEM (03983.HK)$rose more than 3%. In terms of news, on March 12, Sinochem Fertilizer issued a notice stating that the current period is a crucial
📌 Top story — scroll down for more updates Netflix Hopes Sequel Is Gonna Be, Gonna Be Golden 4:00 pm — NFLX -0.3% Netflix (NFLX 0.61%) announced a sequel to KPop Demon Hunters , bringing back directors Maggie Kang and Chris Appelhans for the follow-up to what became the most popular Netflix film of all time with more than 500 million
Baoji Pharmaceutical-B: KJ101 has received clinical trial approval for a new indication; Zijin Mining leads the establishment of a new fund focusing on investment in the field of new quality productivity. Material Matters: Zijin Mining (02899) Leads the Establishment of a New Fund, Focusing on Investment in New Quality Productivity Fields Weichai Power (02338) and
Coal stocks have risen against the market trend. The surge in oil and gas prices has triggered an energy substitution effect, with institutions indicating that domestic and international coal prices may rise beyond expectations. According to Zhitong Finance, the Hang Seng Index fell by 2.55%, or 656 points, to 25,101 points, while the Hang Seng
Don’t panic. Loading audio narration… That’s the first rule investors should follow when considering how to invest when chaos strikes, and the Iran war is no different, market pros told Business Insider. The conflict-fueled sell-off picked up again on Thursday as the war sent oil prices back to $100 a barrel. The S&P 500 is
Tencent swiftly launched five “lobsters.” The last “lobster” in the combo bucket is currently in internal testing and supports direct conversations via WeChat. March 9$TENCENT (00700.HK)$ It was announced that WorkBuddy, an all-scenario AI agent, has officially launched. This product offers capabilities similar to OpenClaw, with full compatibility for its skills but is more user-friendly
Micron (NASDAQ: MU) stock is heading lower in Thursday’s trading amid bearish pressures shaping the broader market. The company’s share price was down 2.8% as of 1:15 p.m. ET. At the same point in the daily session, the S&P 500 and the Nasdaq Composite were down 1.1% and 1.2%, respectively. The memory-chip specialist’s stock was
February’s Consumer Price Index (CPI) report landed Wednesday morning, and it looked rather tame. Prices rose 2.4% year over year, exactly matching Wall Street’s expectations. Core inflation — which strips out food and energy — came in at 2.5%. Rent posted its smallest monthly increase since January 2021. While the number is still above the
On March 10, the Hang Seng Index opened 1.31% higher, and the Hang Seng Tech Index rose by 2%. In the market, the AI application sector performed strongly, with Zhipu gaining over 12%; the oil and gas sector retreated, with Shandong Molong and Zhonggang Petroleum falling over 14%; CATL surged nearly 6% after its earnings
Tencent’s version of the app WorkBuddy, nicknamed ‘Little Lobster,’ has officially launched. Citi stated that there has been a significant shift in the domestic AI paradigm. According to Zhitong Finance, the Hang Seng Index rose by 1.56%, or 396 points, to close at 25,804 points, while the Hang Seng Tech Index increased by 1.4%. The
The S&P 500 index is off just 0.5% year to date. Still, it’s understandable that some investors are feeling jittery. Among the sources of concern are a weak labor market and the conflict in Iran, which is stoking unusual volatility in the oil market. Should crude prices remain elevated for an extended period, that could
Broadcom (AVGO 1.12%) and Advanced Micro Devices (AMD 2.79%) have been trailing Nvidia in the artificial intelligence (AI) chip market in recent years. Still, both companies are now experiencing a nice uptick in their growth thanks to their growing influence in this market. As it turns out, both chip designers have outperformed Nvidia stock in
Novo Nordisk (NYSE: NVO) has faced several headwinds over the past two years. The company suffered clinical setbacks while losing market share to its biggest competitor, Eli Lilly, in the weight-loss drug space. Another issue it had to contend with was that some online health platforms were selling compounded versions of its famous weight loss
Last week, Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) reported its last quarterly earnings. These results were the last with Warren Buffett as CEO and offered plenty to dig into for insights. Operating earnings fell nearly 30% versus the year prior. That drop was accompanied by a 54% drop in insurance underwriting profits, as well as a
①Goldman Sachs’ trading department stated that short positions held by U.S. equity hedge funds have reached a new high in nearly three and a half years. If the war in Iran ends, it may trigger significant short covering, driving a sharp rise in the U.S. stock market; ②Data shows that speculative investors are maintaining bullish
UBS upgrades Rentokil to Buy with 540p target as North America turnaround takes hold Proactive uses images sourced from Shutterstock Rentokil Initial PLC (LSE:RTO), the FTSE 100 pest control and hygiene services group, received a significant vote of confidence on Thursday as UBS upgraded the stock from neutral to buy. The Swiss bank also lifted its
New York — Stocks have climbed, bond yields have fallen and the US dollar has weakened across President Donald Trump’s second term so far — market movements the president has welcomed. But the war with Iran is threatening to disrupt that, sending stocks lower and pushing yields and the dollar higher. That complicates the narrative
