Stocks, Dollar Slide as Trump Tariff Threats and Mideast Tensions Trigger Risk-Off Mood – Europe Market Wrap
Equities and the dollar retreated as dialed-up trade tensions and geopolitical unease set a broader risk-off tone across markets.
S&P 500 futures dropped 0.5%, putting the US benchmark on track for its first back-to-back loss this month. European and Asian stocks also fell. The dollar slid 0.5%, nearing its weakest level since 2022. Treasury yields weakened across the curve ahead of a closely watched $22 billion auction in the 30-year tenor.
US President Donald Trump ratcheted up trade uncertainty with remarks that he intends to impose unilateral tariffs on dozens of US trading partners in the coming weeks. Separately, market jitters intensified amid heightened tensions in the Middle East.
The cautious mood is stalling a rebound in US equities that had brought the S&P 500 within reach of its all-time high, even as questions persist over the economic impact of Trump’s trade agenda. Resilient earnings and limited economic fallout have supported the rally so far, but traders are questioning how much further the gains can stretch.
Thursday’s 30-year Treasury auction will provide a fresh gauge of investor appetite for long-dated debt amid concerns that mounting deficits are dampening demand. The sale comes as Congress debates Trump’s signature tax legislation, which some estimates suggest could add trillions of dollars to the US budget shortfall, potentially requiring increased bond issuance to fund the deficit.
Oil pared Wednesday’s surge of more than 4% as traders evaluated Middle East tensions against the latest news on US trade policy. Brent traded below $69 a barrel, while West Texas Intermediate neared $67.
