Global markets are navigating through a wave of tariff-related headlines and growing geopolitical concerns, leading to a cautious outlook for investors. In early Asian trading, stocks declined, gold surged to a record high, and the yen strengthened to its highest level in more than two months, as sentiment remains fragile.
European stocks are expected to follow suit with a cautious stance on Thursday, as futures indicate a continuation of the downward trend. The pan-European STOXX 600 index fell nearly 1% in the previous session, marking its biggest single-day drop in two months. Despite this setback, European markets have had a strong start to the year, with a double-digit gain so far in 2025, significantly outperforming their U.S. counterparts.
While markets have largely grown accustomed to U.S. President Donald Trump’s tariff threats, viewing them as opening moves in prolonged negotiations, recent comments have heightened concerns. Trump’s derogatory remarks about Ukrainian President Volodymyr Zelenskiy, calling him a “dictator” and urging him to secure peace quickly or risk losing his country, have reignited geopolitical fears, further dampening risk appetite.
This risk-off sentiment has been particularly evident in the currency markets, where the yen has emerged as the major beneficiary. The Japanese currency, bolstered by expectations of another rate hike by the Bank of Japan, reached its highest level since early December, last trading at 150.48 per dollar.
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