European Markets Fall as US–China Trade Tensions Rise
European markets are falling as worries grow about a trade clash between the US and China. Both countries are planning fees on each other’s ships, which is worrying investors. This comes despite US President Donald Trump reassuring the public on social media: “Don’t worry about China, it will all be fine!”
European stocks opened lower on Tuesday, even though Wall Street rose on Monday after Trump spoke positively about US-China relations.
Investors remain nervous as the world’s two biggest economies continue to clash over trade. Starting Tuesday, the US will charge $50 per tonne (€43.27) on Chinese cargo ships at American ports, while China will charge 400 yuan (€48.65) per tonne on US ships. These fees will gradually increase.
Also on Tuesday, China imposed sanctions on five US-linked subsidiaries of South Korea’s shipbuilder Hanwha Ocean, showing its desire to control global shipping.
Trump said he might still meet Chinese President Xi Jinping later this month during a regional summit, though the trade talks are uncertain. Over the weekend, Trump first threatened China with 100% tariffs, then posted on social media that he wanted to help China, not hurt it.
In Europe, investors are also cautious about politics. France’s new government, led by Sébastien Lecornu, will speak to parliament at 15:00 CEST about a budget to reduce the country’s large deficit. In the UK, unemployment rose to 4.8% in the three months to August, raising concerns about the economy.
Market Updates
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London’s FTSE 100 fell 0.38% to 9,406.64.
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Paris’s CAC 40 dropped 0.76% to 7,874.20.
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Frankfurt’s DAX lost 0.87%, at 24,176.42.
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The STOXX 600 fell 0.71%, and Madrid’s IBEX 35 dropped 0.2% to 15,511.00.
Company News
EasyJet shares rose nearly 5% after rumors of a possible takeover by shipping group MSC, even though MSC denied the news. Dan Coatsworth from AJ Bell said investors are still curious about who might buy EasyJet, which explains the rise in shares.
In the US, futures are down: Dow Jones futures fell 0.8%, S&P 500 futures 0.94%, and Nasdaq futures 1.23%. However, US rare earth companies saw big gains amid trade tensions. Critical Metals jumped 33%, USA Rare Earth rose 9%, and MP Materials went up 6% in early European trading.
In other trading, the euro and British pound fell against the US dollar, while the Japanese yen gained some strength.
Oil prices dropped, with US crude falling over 2% to $58.25, and international Brent crude slipping just below $62, also down around 2%.
Gold and silver prices jumped as investors turned to safer assets. Gold rose 0.58% to $4,156.80, and silver briefly hit a record above $52 before settling near $50.
Cryptocurrencies dropped sharply. Before noon in Europe, Bitcoin fell 3.5% to $111,801, and Ethereum dropped over 6.4% to $4,006.49.
Global markets are now focusing on upcoming earnings reports. Investors are worried about a possible AI bubble, as tech company valuations have risen very fast in recent months.
Some experts say the US market looks too expensive, with prices growing faster than company profits. There are fears of a repeat of the 2000 dot-com bubble. Big companies reporting earnings this week include JPMorgan Chase, Johnson & Johnson, and United Airlines.
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