Market Turmoil as Trump Threatens New Trade War with Europe

Global stocks fell sharply as market volatility increased following U.S. President Donald Trump's threats of a trade war with Europe over Greenland. European leaders consider retaliatory tariffs against U.S. imports, while geopolitical tension and Japan's economic concerns add to investor fears.

Global stock markets plummeted on Tuesday after U.S. President Donald Trump reignited trade tensions with Europe, threatening tariffs in a bid to purchase Greenland. Trump's comments followed his disappointment over not receiving the Nobel Peace Prize, urging economic retaliation against several European nations. This led to heightened market volatility on Wall Street, Europe, and Asia.

Amid the chaos, European leaders planned an emergency summit in Brussels to discuss retaliatory measures worth 93 billion euros on U.S. imports. The geopolitical risks have resurfaced, altering market perceptions of alliances in Europe. Meanwhile, Japan faced its own economic challenges with rising government bond yields and concerns over fiscal stability following a snap election call.

Despite the turbulence, U.S. Treasury Secretary Scott Bessent expressed confidence in resolving the situation over Greenland. However, the markets responded with precautionary sell-offs, causing a significant dip in global indices. Oil prices rose slightly, while gold reached record highs, reflecting investors' search for safe havens amid uncertainty.

(With inputs from agencies.)