Global Markets Slide as U.S.–EU Trade Tensions and Rising Yields Weigh on Risk Sentiment

Index Update:  U.S. equities pointed to losses of over 1% across major indices, with the Nasdaq 100 underperforming due to weakness in large-cap technology stocks. Sentiment was hit by President Trump’s plan to impose escalating tariffs on several European countries over the Greenland dispute. Tech stocks were further pressured by rising global bond yields following Japan’s tax-cut pledges. In corporate news, 3M shares fell sharply in premarket trading despite a revenue beat, while Netflix futures edged higher ahead of its earnings release.

Market Movers:  On Friday, the top gainers were Venus Concept Inc. (+459.44%), followed by TNL Mediagene (+65.68%). On the contrary, Springview Holdings Ltd. (-57.32%), and Rich Sparkle Holdings Limited (-36.88%) declined the most the same day.

Commodities Update:  WTI and Brent crude prices declined on Tuesday, with WTI slipping below USD 59 per barrel and Brent falling under USD 64, as renewed U.S.–EU trade tensions raised concerns over global energy demand. Fears of slower economic activity outweighed supply-side risks, especially after President Trump signaled a delay in potential military action involving Iran, easing immediate disruption concerns. While the market continues to face a sizeable supply surplus, localized tightness from Black Sea disruptions and a temporary shutdown at Kazakhstan’s Tengiz field offered limited support. Attention now turns to the IEA’s monthly report for updated global supply and demand guidance. Precious metals strengthened while copper eased on Tuesday amid escalating U.S.–EU tensions and shifting demand signals. Gold rose about 1% to a fresh record above USD 4,720 per ounce, and silver hovered near all-time highs around USD 94.5, supported by increased safe-haven demand following renewed tariff threats linked to the Greenland dispute. Investors are also awaiting the U.S. PCE inflation report for clarity on the Federal Reserve’s policy outlook. In contrast, copper prices slipped to around USD 5.87 per pound as signs of weakening demand in China emerged, with lower import premiums and high prices pressuring consumption, despite longer-term support from energy transition themes and prior supply concerns.

Macro Updates: Escalating U.S.–EU Trade Tensions Over Greenland Dispute

Market sentiment has been rattled after President Trump threatened sweeping tariffs on multiple European countries unless a deal over Greenland is reached. The proposed measures include tariffs starting at 10% in early February, rising to 25% by July, and a separate threat of 200% duties on French wines and champagne. European leaders have strongly criticized the move, with the EU considering retaliatory tariffs on up to €93 billion of U.S. goods and broader economic countermeasures. While tensions are escalating ahead of Trump’s attendance at the World Economic Forum in Davos, markets are also watching a potential U.S. Supreme Court ruling that could invalidate the tariffs, as justices have previously shown skepticism over the administration’s legal justification.

Bonds Commentary:  U.S. Treasury yields rose sharply on Tuesday, with the 10-year yield climbing about 7 basis points to around 4.29%, its highest level since August, amid a global bond sell-off led by Japanese government debt. Concerns over Japan’s fiscal outlook intensified after Prime Minister Takaichi signaled a snap election centered on tax cuts. Bond market pressure was compounded by renewed trade tensions, as President Trump threatened escalating tariffs on several European allies and additional levies on French wine and champagne. Investors are also awaiting a potential U.S. Supreme Court ruling on the legality of key elements of Trump’s trade policies.

Futures Update:  U.S. stock index futures declined sharply on Tuesday after President Donald Trump threatened new tariffs on several European countries, weighing heavily on market sentiment. Dow Jones Futures fell about 1.5%, S&P 500 Futures dropped roughly 1.6%, and Nasdaq 100 Futures slid nearly 1.9% in early trading. The move follows a holiday-shortened week, with Wall Street coming off a period of modest losses across major indices.

Stocks initially moved higher in early trading on Friday but quickly pared their gains and lacked clear direction for the remainder of the session. The major averages spent much of the day bouncing back and forth around the unchanged line before ultimately closing modestly lower. The S&P 500 declined by 4.46 points, or 0.06%, finishing at 6,940. From a technical standpoint, the index faced resistance at key levels and gradually drifted lower, indicating the potential for a near-term decline. The 14-day Relative Strength Index (RSI) is approaching a level just below the mid-point, suggesting that once it crosses below, further accelerated selling could follow. Key support is seen around 6,880—an important level that could prompt a rebound—while resistance is expected near 6,975.