Relations between the US and China worsen as both countries impose new shipping fees, unsettling investors. President Trump attempted to calm markets on social media, writing, “Don’t worry about China, it will all be fine!”
European markets opened lower on Tuesday, despite Monday’s Wall Street rally that followed Trump’s reassurances about relations with Beijing. Investor confidence remains weak as the two economic giants clash over trade.
Both governments introduced fees on each other’s ships on Tuesday. The US will charge $50 (€43.27) per tonne on Chinese cargo entering American ports. China will impose 400 yuan (€48.65) per tonne, with plans to raise the levy gradually.
Beijing also sanctioned five US-linked subsidiaries of South Korea’s Hanwha Ocean as it strengthens its maritime position.
The status of trade negotiations between Washington and Beijing remains unclear. Trump said he still plans to meet Chinese President Xi Jinping later this month during a regional summit.
Over the weekend, Trump threatened China with 100% tariffs before softening his stance. He posted, “Highly respected President Xi just had a bad moment. He doesn’t want a Depression, and neither do I. The USA wants to help China, not hurt it!”
Investors in Europe also watch political developments in France, where new Prime Minister Sébastien Lecornu will address parliament at 15:00 CEST. He plans to stabilise the nation by passing a budget to reduce France’s heavy deficit.
In the UK, rising unemployment—now 4.8% in the three months to August—adds to economic concerns.
European and US Markets Slide Amid Uncertainty
By midday in Europe, major indexes continued to fall. London’s FTSE 100 dropped 0.38% to 9,406.64. Paris’s CAC 40 declined 0.76% to 7,874.20, and Frankfurt’s DAX slipped 0.87% to 24,176.42.
The STOXX 600 lost 0.71%, while Madrid’s IBEX 35 decreased 0.2% to 15,511.00.
In corporate news, EasyJet shares jumped nearly 5% after rumours of a possible MSC takeover. MSC denied the speculation, yet investor interest persisted.
“Investors will speculate about potential buyers for EasyJet, which explains the continued rise,” said Dan Coatsworth, head of markets at AJ Bell.
Across the Atlantic, Dow Jones futures fell 0.8%, S&P 500 futures lost 0.94%, and Nasdaq futures declined 1.23%.
Meanwhile, US rare earth companies surged amid the escalating trade dispute. Critical Metals jumped over 33% in premarket trading, USA Rare Earth gained 9%, and MP Materials rose 6%.
The euro and British pound weakened against the US dollar, while the Japanese yen strengthened.
Oil prices tumbled, with US crude dropping over 2% to $58.25 and Brent crude slipping below $62, down 2%.
Gold and silver prices soared as investors moved toward safe assets. Gold rose 0.58% to $4,156.80, while silver briefly hit a record above $52 before easing to around $50.
Cryptocurrencies plunged. Before noon in Europe, Bitcoin fell 3.5% to $111,801, and Ethereum dropped 6.4% to $4,006.49.
Investors Brace for Earnings and Tech Bubble Fears
Global sentiment remains fragile as investors fear a potential AI-driven market bubble. Tech valuations have surged faster than company profits, drawing comparisons to the 2000 dot-com crash.
Analysts warn that inflated prices could trigger a sharp correction if earnings disappoint.
Investors now await quarterly results from major US firms. JPMorgan Chase, Johnson & Johnson, and United Airlines will report financial updates this week.
Market watchers expect these earnings to shape the next phase of global investor confidence.
