A sharp sell-off in U.S. assets, triggered by President Trump’s threat to impose sweeping tariffs on European allies over a dispute regarding Greenland, spilled into overseas markets on Wednesday.
Benchmark indexes in Asia edged lower. Taiwan’s Taiex index fell more than 1.5 percent, while Japan’s Topix dropped 1 percent. Trading was more mixed in Europe, with markets in France and Germany recording a small declines, while stocks in Britain were flat. U.S. stock futures pointed to a slightly higher open.
The dollar weakened against the Japanese yen but gained against the euro.
The price of gold, which has soared in recent months, continued to rise, setting a fresh record above $4,800 an ounce. Gold often acts as a haven for investors during times of turmoil.
A survey of metals analysts conducted by the LBMA, an industry group, found that most of the market watchers expected gold to breach $5,000 per ounce for the first time this year. “Persistent geopolitical uncertainty — from conflicts to institutional tensions — keeps safe‑haven demand elevated,” the survey found.
The upheaval in global markets signaled a return of the trade policy-driven volatility that has defined much of the second Trump administration. The slide in stocks began after Mr. Trump threatened a new round of tariffs against eight European nations unless they facilitated a U.S. takeover of Greenland, sparking fears that a new period of tit-for-tat trade restrictions would weigh on global growth.
In the United States on Tuesday, Mr. Trump’s remarks led U.S. stocks to fall to their lowest in months, the dollar to weaken, and the yield on 10-year treasuries — a benchmark for U.S. borrowing costs — to climb. (Yields move inversely to prices.) This was the first major period of what’s called a triple sell-off in U.S. assets since April, when the Trump administration unveiled plans for tariffs on dozens of U.S. trade partners.
The tumultuous trading on Wednesday ended a period of relative market calm. In the months following the April shock, markets rebounded after a series of trade deals and carve-outs to Mr. Trump’s tariffs. The S&P 500 in the United States and the Nikkei 225 in Japan had both reached record highs earlier this month.
Another factor roiling global markets has been a sell-off in Japanese government bonds. Yields on those long-term bonds have surged this week, as investors called into question Japan’s fiscal discipline following Prime Minister Sanae Takaichi’s call for a snap election and costly pledge to cut sales taxes.
In an interview with Fox News at the annual World Economic Forum in Davos, Switzerland, U.S. Treasury Secretary Scott Bessent said that the sell-off in Japanese government bonds had spilled over into the U.S. Treasuries market.
While some investors characterized the Trump administration’s latest threats against Europe as a familiar negotiating tactic designed to elicit concessions before being withdrawn, the slump in U.S. markets suggests a diminishing tolerance for uncertainty.
“Markets recently have seen a clear trend of capital flight from the U.S. market,” said Takahide Kiuchi, the executive economist at Japan’s Nomura Research Institute. “To restore stability to financial markets, the Trump administration may be forced to reassess its tariff policies toward Europe,” he said.
River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.
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