European Equities Remain Firm as US Markets Fall: Get More Updates

The sell-off in global markets moderated in Europe on Tuesday, following a dramatic drop in US stocks as investors expressed anxiety about the negative economic impact of President Donald Trump’s tariffs. It came after the president stated in a television interview that the world’s largest economy was in a “period of transition” when questioned about the possibility of a recession. Since those statements were televised on Sunday, top Trump officials and advisors have attempted to allay market concerns.

The US S&P 500 stock index plummeted over 3% on Monday, although most of Europe’s main markets began unchanged. In a Fox News interview broadcast over the weekend but filmed on Thursday, Trump appeared to address economic concerns.

“I hate to predict things like that,” he stated. “There is a moment of transition because what we’re doing is so large. We are returning prosperity to America. That’s a major deal. Charu Chanana, an investment strategist at investment bank Saxo, told the BBC that “the previous notion of Trump being a stock market president is being re-evaluated.” On Monday in New York, the S&P 500, the largest publicly traded firm in the United States, closed 2.7% down, while the Dow Jones Industrial Average fell 2%. The tech-heavy Nasdaq share index was hammered especially hard, falling 4%.

Tesla stock plunged 15.4%, while Nvidia, the world’s most considerable artificial intelligence (AI) chipmaker, lost more than 5%. Other large tech stocks, including Meta, Amazon, and Alphabet, dropped dramatically. On Tuesday, Asian equities plunged dramatically before rebounding. Japan’s Nikkei 225 finished 0.6% down, while South Korea’s Kospi fell 1.3%. The dollar fell more versus the pound and the euro on Tuesday, having dropped substantially since the beginning of the month. However, there was little evidence of the volatility spreading into Europe. While the FTSE 100 index, which measures the largest businesses listed in the UK, fell 0.1%, Germany’s Dax index surged 0.4%, and the French Cac 40 increased 0.2%.

“Trump is keeping political leaders guessing about his next tariff moves, but the problem is that he’s also keeping investors guessing, which is reflected in the negative market mood,” said Tim Waterer, chief market analyst at financial services firm KCM Trade. “While crisis talk may be untimely, the mere prospect of this coming to fruition is sufficient to put traders into a defensive mentality.”

Ruth Foxe-Blader of Foxe Capital told the BBC’s Today program that Monday had been a “tough and chaotic day for the stock market in the United States” and that “the markets hate chaos.” She said investors responded to Trump’s policies while dumping tech stocks they believed were expensive. Last week, the leading US markets returned to the level observed before Trump’s election victory in November, which investors had first applauded due to promises of tax cuts and reduced regulation. Investors are concerned that Trump’s tariffs, which are charges imposed on products as they enter the nation, would raise costs and slow growth in the world’s largest economy.

The president announced the steps after blaming China, Mexico, and Canada for not doing enough to stop the flow of illegal narcotics and people into the United States. The three countries have denied the charges. According to economist Mohamed El-Erian, investors were initially enthused about Trump’s pledges for deregulation and lower taxes but underestimated the risk of a trade war. “It’s a complete change in what the market expected,” he continued, stressing that investors are also responding to evidence that firms and families are beginning to hold back on spending due to uncertainty, which might harm economic development. However, President Trump’s financial advisor, Kevin Hassett, has pushed back against those who predict a dismal future.

In an interview with CNBC, Hassett stated several reasons to be hopeful about the US economy and that tariffs on Canada, Mexico, and China were already driving manufacturing and jobs to the US. “There are a lot of grounds to be highly optimistic about the economy going ahead,” he remarked.