European stocks edged lower Wednesday as markets braced for US President Donald Trump’s speech at the World Economic Forum in Davos, Switzerland. The decline followed renewed tariff threats and heightened geopolitical tensions over Trump’s push to seize Greenland.
Okay News reports that Trump has threatened tariffs of up to 25% on several European countries, including France, Germany, Britain, and Denmark, in response to their opposition to his Greenland plans. The move has sparked warnings of retaliation from European Union leaders.
EU Commission President Ursula von der Leyen said the bloc would be “unflinching” in its response to Trump’s threats, while US Treasury chief Scott Bessent urged Europeans to avoid “reflexive anger” and listen to Trump’s arguments.
Analysts say markets are watching closely to see if Trump doubles down on his Greenland ambitions. “If he sticks to his guns about taking Greenland under US control, and if he continues to sideline his closest allies, then risk sentiment could take another dive lower,” said Kathleen Brooks, research director at trading group XTB.
Concerns over the Greenland dispute pushed precious metals to fresh highs, as investors sought safe havens amid uncertainty. Global markets have already suffered losses this week, with Wall Street’s three main indexes tumbling on Tuesday after reopening from a long weekend.
Asian markets showed mixed performance: Tokyo’s Nikkei 225 fell 0.4%, while Hong Kong’s Hang Seng Index rose 0.4% and Shanghai’s Composite gained 0.1%. Japanese bond yields, which surged earlier on tax-cut pledges by Prime Minister Sanae Takaichi, eased after Finance Minister Satsuki Katayama called for calm.
In company news, British luxury fashion brand Burberry saw its shares jump 5% in London after reporting stronger sales driven by improved demand from China.
Key European indices reflected the cautious mood: London’s FTSE 100 dipped 0.1% to 10,113.83 points, Paris’s CAC 40 slipped 0.1% to 8,052.17, and Frankfurt’s DAX fell 0.8% to 24,513.93.
Commodity markets also softened, with Brent crude down 0.5% at $64.57 per barrel and West Texas Intermediate crude at $60.04. Currency markets saw the euro weaken slightly to $1.1709, while the pound slipped to $1.3403 against the dollar.
Investors now await Trump’s Davos address, which could set the tone for global markets in the days ahead.
