By Marc Jones
LONDON (Reuters) -Below are some of the sizable financial market moves prompted by the actions of U.S. President Donald Trump in recent weeks from his re-ignition of a global trade war to the signal that Europe can no longer take the support of U.S. military muscle for granted.
1/ $5 TRILLON WIPEOUT
It is almost easier to list the parts of the market that haven’t been bashed around than those that have. The numbers are big. Roughly $5 trillion wiped of the value of world stocks, the bulk of that from U.S. markets and the super-sized tech firms that have been on stratospheric runs in recent years.
King dollar has been brought down a peg or two amid worries that a global trade war combined with a mass cull of government workers will finally put the brakes on the U.S. economy.
Euro and yen have had their own fires lit thanks to Europe’s massive defence spending plans and the Bank of Japan’s interest rate hikes.
“We’ve seen a sea change in perception in the almost two months since President Trump was inaugurated,” Bill Clinton’s Treasury Secretary Larry Summers posted on X, adding election night expectations of a rampant economy and U.S. “exceptionalism” under Trump have evaporated for now.
Brent crude oil has slipped 2% so far this month, with year-to-date losses of almost 5%, a sign that commodities traders too are positioning for weaker global demand.
2/ FALL STREET
If it wasn’t for COVID-19 and the enormous spike in inflation and interest rates it led to in 2022, then this would be Wall Street’s worst start to a year since the depths of the financial crisis.
In the last month, the shares of the so-called Magnificent Seven – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – are down, and most by 10%-15%.
3/ TESLA TROUBLES
Tesla’s shares have been hit even harder, crashing 30% over the month and seeing their biggest one one-day dive in four-and-a half years earlier this week.
Activists have lately staged so-called ‘Tesla Takedown’ protests to voice anger over Musk’s role in sweeping cuts to the federal workforce at the behest of Trump and cancellation of contracts that fund humanitarian programs around the world.
Musk, the world’s richest person, is spearheading the Trump administration’s Department of Government Efficiency, or DOGE.
“They’re harming a great American company,” Trump said at the White House, referring to the demonstrators, alongside Musk who was wearing a black “Make America Great Again” baseball cap.
4/ BUNDS GO WILD
Germany’s reaction to Trump’s clear signal that Europe needs to be able to defend its own backyard and should no longer rely on U.S. might was a historic plan to put aside self-imposed debt limits and create a 500 billion euro defence and infrastructure fund.
That triggered the biggest rise in Germany’s ‘Bund’ yield – effectively what Berlin pays to borrow in the bond markets – since the country’s reunification in 1990.
Economists say it will drive a sharp increase in Germany’s relatively modest debt level but also lift its economy out of the doldrums.
“The package is a game changer,” AXA’s chief economist Gilles Moec said.
5/ MORE MEGA THAN MAGA
The tectonic defence spending shift has also caused a huge surge in the share prices of European weaponsmakers.
The region’s aerospace and defence index is up almost 40% since mid-January, European stocks more broadly have outperformed U.S. peers by roughly 15%.Chinese stocks have been flying too after DeepSeek showed China tech firms aren’t as far behind in the AI race as had been presumed and Beijing has provided a steady flow of stimulus for its tariff-hit economy.
6/BITCOIN BASHED
Bitcoin tumbled after Trump’s long-promised move to establish a ‘strategic reserve’ of cryptocurrencies left enthusiasts disappointed.
The snag was the government won’t be buying new tokens, but stockpiling bitcoin and other cryptocurrencies it already owns.
Bitcoin slid as low as $76,666 this week after hitting an all-time high at $109,071 in January.
7/ VOLATILE TIMES
Plenty of key market volatility gauges have been shaken awake by trade war salvos and geopolitical wrecking balls.
The VIX – which measures the shakiness of the S&P 500 – is now almost a third of the way to its pandemic peak.
Canadian dollar volatility has surged given it is front and centre in the trade war and with Trump calling Canada the U.S.’ 51st state.
The ‘MOVE’ debt market volatility gauge has jumped thanks to a spike in German bond yields and a hefty drop in U.S. Treasury yields.
“Ambiguity that’s being created by U.S tariff policy is clearly impacting the domestic U.S. economy, but it will have a bigger impact on the global economy.” Guy Miller, chief market strategist and economist, at insurance group Zurich said.
(Additional reporting by Dhara Ranasinghe in London; Editing by Toby Chopra)
