London, Jan 21, 2026, 09:27 GMT
European shares slipped on Wednesday amid lingering concerns over U.S. President Donald Trump’s tariff warnings linked to Greenland. By 0810 GMT, the STOXX 600 had dropped 0.1%. Financial stocks, including banks, were the biggest decliners. London’s FTSE 100 held steady, while miner Rio Tinto climbed after beating forecasts for full-year iron ore shipments. (Reuters)
Tuesday’s sharp selloff knocked the FTSE 100 down 0.72%. The drop came after Trump threatened to slap an additional 10% tariff on imports from eight European countries, Britain included, starting Feb. 1—unless the U.S. gets the green light to buy Greenland. “Geopolitical tensions have dented sentiment and cooled early-year exuberance,” said Laura Cooper, a strategist at Nuveen. AstraZeneca shares slipped after announcing plans to delist its American Depositary Shares and debt securities from Nasdaq. (Reuters)
Bond markets have stepped up their momentum. Japan’s 10-year government bond yields surged nearly 19 basis points over two days, while long-dated U.S. yields climbed to their highest levels since late August as investors factored in increased borrowing and political uncertainty. “If there is a strong mandate following the election, that could open the door to more fiscal spending,” noted Seema Shah, chief global strategist at Principal Asset Management. (Reuters)
Bloomberg reported that concerns over tariffs and Japan’s bond selloff reignited a “sell America” sentiment, boosting safe-haven assets like gold and the Swiss franc. (Bloomberg)
In the UK, new labour-market data failed to calm jitters. Unemployment stayed steady at 5.1% for the three months ending November, while pay growth excluding bonuses slowed to 4.5%, according to official stats cited by interactive investor. The same report noted that France’s drinks company Remy Cointreau dropped over 4% after Trump threatened a 200% tariff on French wine and champagne. (Interactive Investor)
Tuesday saw a broad pullback from risk assets. The S&P 500 dropped 2.06%; the Nasdaq lost 2.39%. Europe’s STOXX 600 dipped 0.7%, while gold surged to a new high of $4,757.78 an ounce. “This is a pretty significant risk-off day,” said Wasif Latif, chief investment officer at Sarmaya Partners — a trader’s way of saying money is moving out of stocks and into safer bets. (Reuters)
The S&P 500 finished at 6,101.26, while the Dow wrapped up at 43,487.83, the Associated Press reported, as investors digested Trump’s tariff threat tied to Greenland. (AP News)
Japan’s selloff hit hardest at the long end. Twenty-year yields jumped 28 basis points over two days, pushing past 3.4%. At the same time, 30- and 40-year yields surged about 40 basis points, breaking through 3.8% and 4% respectively. Traders are calling it a debt shock reminiscent of past turmoil. “Markets are digesting the idea that all parties in Japan are in a race to see who can promise to spend more money,” said Ales Koutny, head of international rates at Vanguard in London. (Reuters)
Opposition leader Yuichiro Tamaki told Reuters the government and Bank of Japan must act “decisively” against what he described as abnormal market moves. He suggested buying back bonds or cutting issuance of ultra-long debt, which usually matures in 30 to 40 years. Tamaki also didn’t rule out currency intervention to bolster the yen. (Reuters)
Some investors are holding back ahead of the Bank of Japan’s policy meeting on Friday. Fred Neumann, HSBC’s chief Asia economist, pointed to the Governor’s press conference as a key moment. He cautioned that a dovish shift could fuel more volatile market moves ahead of the election. (Reuters)
Rising yields pose a challenge for stocks by pushing up borrowing costs everywhere—from mortgages to corporate debt. Ian Lyngen, BMO Capital Markets’ head of U.S. rates strategy, warned that Trump’s threat to impose tariffs on wine “appears to be just the start of a tariff escalation.” (Investopedia)
A Reuters Morning Bid column noted investors are eyeing an emergency meeting of EU leaders on Thursday for Europe’s next move, while Citi downgraded European equities amid growing uncertainty over earnings. The World Economic Forum in Davos also emerged as a key near-term event, as policymakers and business leaders assess the chances of additional trade measures. (Reuters)
The major risk now is that the policy threat becomes reality fast, forcing markets to reassess growth and interest rates simultaneously. “Markets have slipped back into a risk-off mood,” said Axel Rudolph, senior technical analyst at IG, noting that ongoing geopolitical and trade tensions might keep volatility high. (Proactiveinvestors)
