Today's Edition
NEW YORK/PARIS (REUTERS)
Global stocks were lower across the board on Tuesday, with a selloff in equities on Wall Street, Europe, and Asia and record highs for gold and silver, after US President Donald Trump's threatened a trade war with Europe over Greenland, triggering increased market volatility .
Trump said he no longer thought "purely of peace" after he did not win the Nobel Peace Prize and reiterated a threat to increase tariffs on EU members Denmark, Finland, France, Germany, Sweden, and the Netherlands, along with Britain and Norway, until the US is allowed to buy Greenland.
The threats reignited the "Sell America" trade that emerged after Trump's "Liberation Day" levies announced last April.
EU leaders will discuss options, including tariffs worth 93 billion euros ($109 billion) on US imports, at an emergency summit in Brussels on Thursday.
The Dow Jones Industrial Average fell 1.75%, the S&P 500 fell 1.97% and the Nasdaq Composite fell 2.19%. Wall Street's most-watched gauge of investor anxiety, the Cboe Volatility Index, jumped to an eight-week high of 20.75.
Europe's STOXX 600 fell 0.7% on the day, having already fallen 1.2% on Monday, while the MSCI World Equity Index was down 1.39%. The FTSE 100 fell 0.67% .
Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.63%, while Japan's Nikkei fell 1.11%. Japanese government bonds (JGBs) plunged, sending yields to record highs, after Prime Minister Sanae Takaichi's calling of a snap election shook confidence in the country's fiscal health.
US Treasury Secretary Scott Bessent told reporters in Davos on Tuesday that he was confident that the US and European countries would find a solution over the Trump administration's aim to take over Greenland.
The euro was up 0.67% against the dollar at $1.1723, having earlier hit its highest since January 2. The Japanese yen strengthened 0.02% against the greenback to 158.08 per dollar. The dollar index was down 0.54% at 98.55 heading for its second day of declines.
US Treasury yields hit their highest since September in early trading. US markets were closed on Monday for a public holiday, so the moves were a delayed reaction to the developments that began over the weekend.
The yield on benchmark US 10-year notes rose 5.4 basis points to 4.285%. The yield curve between 2-year and 10-year US Treasuries, and between 10-year and 30-year US Treasuries, steepened by the most since October .
The yield on the benchmark German 10-year Bunds fell 0.5 basis points to 2.856%.
Oil prices edged higher, with Brent crude futures up 1.2% at $64.71 a barrel and US West Texas Intermediate settled up 1.51% at $60.34 a barrel.
Gold hit a record high, rising above $4,700 an ounce. It was last up rose 2% to $4,763.28 an ounce.
Spot silver slipped 0.20% to $94.53/oz, after hitting a record $95.87 earlier.
