Global financial markets experienced significant downturns on Monday as investors reacted to fresh tariff threats issued by U.S. President Donald Trump, raising concerns of renewed trade tensions and potential impacts on global economic growth.

U.S. stock futures fell sharply, while major European and Asian indices declined as gravity returned to risk assets in the wake of the announcement.

The slide in equities reflected fear that elevated trade barriers could disrupt supply chains and corporate earnings, unnerving markets that had shown relative stability earlier in the year.

European markets were particularly hard hit, with the pan-European STOXX 600 index dropping more than one per cent, France’s CAC 40 and Germany’s DAX both posting notable losses, and the UK’s FTSE 100 retreating as well.

Traders cited uncertainty over Trump’s proposed tariffs on goods from multiple allied countries as a key driver of the sell-off.

Asian markets also reflected subdued sentiment, with Japan’s Nikkei index sliding, though some regional indices showed mixed performance.

Investors shifted capital toward traditional safe-haven assets amid the volatility, pushing gold and silver prices to record highs and strengthening the Swiss franc as demand for defensive holdings surged.

The sell-off extended beyond developed equities, with emerging market benchmarks also weakening on concerns over reduced global demand and trade disruptions if tariffs were implemented.

These market movements intensified ahead of key global economic discussions, including the World Economic Forum meeting in Davos, where trade policy and geopolitical developments are expected to be focal points of debate.