Global Markets Slide as US-Europe Trade Tensions Shake Investor Confidence

Global financial markets retreated on Tuesday as renewed trade tensions between the United States and Europe rattled investors, pushing stocks, the dollar and long-dated US Treasuries lower. The sell-off, reported by Reuters, reversed gains recorded earlier in the week and underscored growing uncertainty over the global economic outlook.

The market reaction followed President Donald Trump’s renewed threat to impose tariffs on European imports, a move that reignited what analysts described as a “Sell America” trade. Investors responded by trimming exposure to US assets, echoing the market behaviour seen after a similar tariff announcement in April last year.

On Wall Street, signs of rising anxiety were evident. The Cboe Volatility Index, a key measure of investor fear, climbed as much as 1.9 points to an eight-week high of 20.69. Meanwhile, the S&P 500 Index fell 1.1 per cent to 6,859 points, reflecting broad weakness across equities.

Market experts say the shift signals caution rather than panic. Jim Carroll, senior wealth adviser and portfolio manager at Ballast Rock Private Wealth, noted that risk metrics have moved meaningfully since Friday but stopped short of indicating extreme stress. Others pointed out that the rise in volatility was partly expected after last week’s monthly equity options expiration.

In currency markets, the US dollar lost its safe-haven appeal, falling 0.6 per cent against a basket of major currencies to a more than two-week low. At the same time, euro volatility jumped, highlighting nervousness over the trade standoff. Analysts warn that without clear progress toward resolving tariff threats, markets could face further bouts of volatility in the days ahead.

source: punch