Global markets down as geopolitical risks shape global outlook

Global risk assets came under significant pressure on Tuesday as geopolitical tensions and trade-related policy rhetoric dominated sentiment.

Major US equity indices extended prior-session losses, closing lower with the S&P 500 declining 1.9%, the Dow closing lower at 1.7% and Nasdaq dipping 1.9%. Large-cap tech and semiconductors led declines with Nvidia (-4.4%), Broadcom (-5.4%) and Oracle (-5.8%), alongside cyclicals and industrials, as investors cut high-beta exposure. Corporate news provided scant relief with 3M tumbling 7% on weak guidance despite beating revenue forecasts, while Netflix fell 1.10% amid reports of a potential all-cash bid for Paramount.

The sell-off stemmed from President Donald Trump's World Economic Forum (WEF) comments and social media posts threatening 10–25% tariffs – from 10% on 1 February, rising to 25% by June – on goods from eight European countries opposing US control of Greenland. This weighed heavily on risk appetite, sparking a broad equity pullback and “risk-off” rotation into safe havens like gold, which surged to record levels above $4 700 per ounce, with platinum up 4.40%.

Against this backdrop, commodity dynamics remained nuanced, with oil prices consolidating after recent advances, with industrial metals like copper trading softer amid concerns over Chinese demand. Overall, the market environment reflected elevated volatility and a prevailing preference for quality assets amid rising uncertainty around trade relations, monetary policy expectations and diplomatic engagement at global forums.

Equity markets in Europe and Asia echoed this downward trend, with European indices like the STOXX 600 registering a 0.70% drop, while STOXX 50 fell 0.60% closing at 5 893. Asian benchmarks such as Hong Kong’s Hang Seng Index trended lower alongside US futures. Traders also cited macroeconomic data including China’s slowing GDP growth and Europe’s mixed economic indicators, including recent CPI figures marginally below target, as additional contributors to the cautious mood among investors. 

In South Africa, domestic markets on Tuesday exhibited mixed performance. The FTSE/JSE All-Share Index ended on 0.35%, with marginal moves as resource sector gains offset weakness in industrial stocks. Market participants have shifted focus toward upcoming inflation data and potential implications for monetary policy given expectations of continued inflation near the South African Reserve Bank’s (SARB) revised target band. The rand weakened against the US dollar, tracking global risk aversion flows for most of the day. Overall, the local bourse reflected resilience amid an otherwise risk-off global backdrop, even as external pressures particularly on currency and bond markets rippled through investor sentiment.