US sharemarkets were closed on Monday for the Martin Luther King Jr Day holiday, with trading set to resume on Tuesday. Despite the holiday, futures pointed lower, with S&P 500 futures down close to 1%, setting a cautious tone for global markets. Precious metals rallied, with gold and silver surging to fresh record highs as investors sought safe havens amid rising geopolitical uncertainty.
European Markets Retreat on Tariff Threats
European sharemarkets finished lower as investors reacted to renewed tariff threats from the United States linked to President Donald Trump’s push for control of Greenland. The pan-European Stoxx 600 fell 1.23%, with most sectors in negative territory as political risk overshadowed corporate fundamentals.
Losses were led by autos and luxury goods, both seen as highly exposed to trade disruption. Carmakers underperformed, with the regional automobiles and parts index down more than 2%. Luxury stocks also sold off heavily, dragging the Stoxx Europe Luxury 10 lower by more than 3%.
There were limited pockets of resilience. Defence stocks edged higher, providing modest support, while parts of the semiconductor sector were mixed following company updates. Overall, the European session was dominated by risk aversion as investors assessed the implications of escalating tariff tensions.
Geopolitics and Davos in the Spotlight
Looking ahead, markets remain on alert ahead of President Trump’s scheduled appearance at the Davos global summit early Thursday. Investors are also watching for a potential US Supreme Court ruling on tariff policies, which could be released as soon as Tuesday and would carry added significance given the latest tariff threats against European nations.
Australian Market Outlook
Australian shares are set to open lower, with ASX 200 futures down 31 points, or 0.4%, to 8813.
With no major local economic data due, attention is turning to the domestic reporting season. Quarterly results from BHP and Hub24 are expected on Tuesday, followed by Rio Tinto on Wednesday and Fortescue on Thursday.
