Tensions between China and the US continue rising as both nations impose fees on each other’s ships, alarming investors. President Trump tried to calm markets with a social media post, saying, “Don’t worry about China, it will all be fine!”
European markets opened lower on Tuesday, despite Wall Street’s gains the previous day after Trump’s reassurance about relations with Beijing. Investors remain uneasy as the two largest economies trade fresh blows over commerce.
Both sides began applying ship fees on Tuesday after Washington investigated China’s growing control of global shipbuilding. The US imposed a $50-per-tonne (€43.27) fee on Chinese ships entering American ports. Beijing responded with a 400-yuan (€48.65) fee per tonne that will rise gradually.
China also sanctioned five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean to reinforce its maritime authority.
The status of trade negotiations remains uncertain. Trump said he might still meet Chinese President Xi Jinping later this month at a regional summit.
Over the weekend, Trump threatened China with 100% tariffs but then softened his stance online, saying he respected Xi and wanted to help China, not harm it.
European investors also focused on domestic politics as France’s new prime minister, Sébastien Lecornu, prepared to address parliament at 15:00 CEST. He plans to present a budget aimed at stabilizing France’s economy and reducing its deficit.
In Britain, unemployment rose to 4.8% in the three months to August, intensifying concerns about the economy’s health.
European Markets Slide as Investors React to Global Tensions
By midday, major European stock indexes showed widespread losses. The FTSE 100 in London fell 0.38% to 9,406.64, the CAC 40 in Paris dropped 0.76% to 7,874.20, and the DAX in Frankfurt slid 0.87% to 24,176.42.
The STOXX 600 fell 0.71%, while Madrid’s IBEX 35 dropped 0.2% to 15,511.00.
In corporate news, EasyJet shares surged nearly 5% after rumours of a takeover by shipping group MSC. MSC denied the reports, yet investors continued speculating about potential buyers.
“Investors will now consider who might want to buy EasyJet,” said Dan Coatsworth, head of markets at AJ Bell. “That’s why shares remain high despite MSC’s denial.”
Across the Atlantic, futures also fell. Dow Jones futures dropped 0.8%, S&P 500 futures fell 0.94%, and Nasdaq futures slid 1.23%.
US rare earth companies saw significant gains amid the escalating trade conflict. Critical Metals jumped over 33% in premarket trading, USA Rare Earth rose 9%, and MP Materials advanced 6%.
The euro and British pound weakened against the dollar, while the Japanese yen gained strength.
Oil prices sank as US benchmark crude dropped over 2% to $58.25, and Brent crude fell below $62, losing around 2%.
Gold and silver soared as investors turned to safe-haven assets. Gold climbed to $4,156.80, up 0.58%, while silver briefly reached $52 before slipping to $50.
Cryptocurrencies slumped. Before noon in Europe, Bitcoin dropped 3.5% to $111,801, and Ethereum fell 6.4% to $4,006.49.
Investors Brace for Earnings as Market Anxiety Builds
Global investors remain on edge as fears of an AI-driven market bubble grow. Analysts say tech valuations have surged far beyond corporate earnings, echoing the warnings of the early 2000s dot-com crash.
Critics argue that US markets now look overpriced after months of rapid price growth unmatched by profit increases.
These concerns raise the stakes for the upcoming earnings season. Major firms including JPMorgan Chase, Johnson & Johnson, and United Airlines will release financial updates this week.
Market watchers expect those results to reveal whether the US economy can sustain its momentum or face a sharper correction in the coming months.
