Trump's Tariff Threats Push Markets into Red
European stocks fell sharply on Monday, weighed down by ongoing global geopolitical tensions and investor caution ahead of the release of Eurozone consumer inflation data for December later in the day.
Political Pressures Mount in Europe
The decline in European markets coincided with intense efforts by European leaders to address US President Donald Trump's renewed calls for the annexation of Greenland, which have sparked a new wave of political anxiety across the continent.
Trump said that NATO had warned Denmark for years about what he called the Russian threat to Greenland, claiming that Copenhagen had failed to take action.
"Now is the time, and it will happen!" Trump wrote in a post on his Truth Social platform ahead of the World Economic Forum's annual meeting in Davos this week.
European Market Performance Today
The pan-European STOXX 600 index fell 0.8% to 609.79 points, after closing Friday's session flat with a slight downward bias.
Major European indices also recorded significant losses:
- Germany's DAX: down 1.5%
- France's CAC 40: down 1.8%
- FTSE 100: down 0.9%
Tariffs Weigh on Investor Sentiment
European markets came under increased pressure as the US renewed its threats of imposing new tariffs, negatively impacting global investor sentiment, particularly amid fears of a trade escalation that could affect economic growth and financial markets.
European Inflation Data Awaited
In addition to political tensions, investors are awaiting the release of inflation data from the Eurozone, which will play a pivotal role in determining the European Central Bank's monetary policy direction in the coming period, adding further caution to market movements.
Market Outlook
Amid increasing political and economic uncertainty, European markets are likely to remain under pressure in the short term, as investors await developments in the global geopolitical landscape, inflation data results, and any new signals regarding US trade policy.
