European stocks are expected to open lower on Tuesday, following U.S. President-elect Donald Trump's announcement on his Truth Social platform about plans to enforce an additional 10% tariff on goods from China and a 25% tariff on all products from Mexico and Canada. Trump mentioned that this initiative aims to significantly reduce the unprecedented levels of migrants and illegal drugs crossing U.S. borders.
Asian markets mostly trended downwards, with the exception of Chinese and Hong Kong exchanges, which resisted the overall downward movement. Japan's Nikkei index decreased nearly 1.5% as export-oriented companies were negatively impacted by the strengthening yen.
The U.S. dollar saw a strong rebound after Trump's tariff declaration. Meanwhile, gold remained relatively stable, trading just above $2,600 per ounce, and oil prices managed a slight recovery, having previously dropped by nearly 3% during the U.S. trading session overnight. This decline was partly due to Israel's progress towards a ceasefire agreement with Hezbollah.
Investors will also be paying attention to upcoming U.S. economic reports on new home sales, consumer confidence, and the minutes from the latest Federal Reserve meeting, which could influence market activity later in the day.
Observers are eagerly anticipating Wednesday's publication on personal income and spending, which will include the Federal Reserve's favored inflation metrics. Forecasts suggest that inflation, as indicated by the Personal Consumption Expenditures index, likely saw renewed acceleration in October.
U.S. financial markets will be closed on Thursday in observance of the Thanksgiving holiday and will have an early closure on Friday.
In the previous night's trading, U.S. stocks finished higher as bond yields decreased following news that Donald Trump plans to appoint billionaire hedge fund manager Scott Bessent as Treasury Secretary. This led to the Dow Jones Industrial Average increasing by 1%, continuing its upward trajectory for the fourth consecutive session and reaching a new record closing high. The S&P 500 gained 0.3%, marking its sixth consecutive day of gains, with the tech-driven Nasdaq Composite also climbing by 0.3%.
European markets concluded Monday positively, with bond yields declining in response to Trump's choice for Treasury Secretary. The pan-European STOXX 600 closed virtually unchanged yet exhibited a slight positive inclination. Germany's DAX and the U.K.'s FTSE 100 both rose by approximately 0.4%, while France's CAC 40 ended the session slightly higher.
