European Stocks Hold Steady Despite US Market Plunge

The sell-off in global markets moderated in Europe on Tuesday, following a dramatic drop in US stocks as investors expressed anxiety about the negative economic impact of President Donald Trump's tariffs.
It came after the president stated in a television interview that the world's largest economy was in a "period of transition" when asked about the possibility of a recession.
Since those statements were televised on Sunday, top Trump officials and advisers have attempted to allay market concerns.
The US S&P 500 stock index plummeted over 3% on Monday, although most of Europe's main markets began unchanged.
In a Fox News interview broadcast over the weekend but filmed on Thursday, Trump appeared to address economic concerns.
"I hate to predict things like that," he told me. "There is a period of transition because what we're doing is so large. We are returning prosperity to America. That's a significant deal.
Charu Chanana, an investment strategist at investment bank Saxo, told the BBC that "the previous notion of Trump being a stock market president is being re-evaluated."
On Monday in New York, the S&P 500, which measures the largest publicly traded firms in the United States, closed 2.7% lower, while the Dow Jones Industrial Average fell 2%.
The tech-heavy Nasdaq share index was hammered especially hard, falling 4%.
Tesla stock plunged 15.4%, while Nvidia, the world's most considerable artificial intelligence (AI) chipmaker, fell more than 5%. Other large tech stocks, including Meta, Amazon, and Alphabet, also fell dramatically.
On Tuesday, Asian equities plunged dramatically before recovering. Japan's Nikkei 225 closed 0.6% lower, while South Korea's Kospi fell 1.3%.
The dollar fell more versus the pound and the euro on Tuesday, having dropped substantially since the beginning of the month.
However, there was little evidence of the volatility spreading into Europe. While the FTSE 100 index, which measures the largest businesses listed in the UK, fell 0.1%, Germany's Dax index surged 0.4%, and the French Cac 40 increased 0.2%.
"Trump is keeping political leaders guessing about his next tariff moves, but the problem is that he's also keeping investors guessing, which is reflected in the negative market mood," said Tim Waterer, chief market analyst at financial services firm KCM Trade.
"Whilst recession talk may be premature, the mere prospect of this coming to fruition is enough to put traders into a defensive mindset."
Ruth Foxe-Blader of Foxe Capital told the BBC's Today program that Monday had been a "tough and chaotic day for the stock market in the United States" and that "the markets hate chaos."
She said investors were reacting to Trump's policies while also selling tech stocks they believed were expensive.
Lindsay James, an investment analyst at Quilter Investors, stated that the dip in Tesla's share price "comes down to hard numbers," with fresh orders in Europe and China half over the last year.
She stated that while "an element" of Elon Musk's politics "has a brand impact," "there are other angles," such as rivalry from Chinese electric vehicle makers and investors "getting more worried about an economic slowdown."
After the market closed on Monday, a White House official told reporters:
"We're seeing a strong divergence between [the] animal spirits of the stock market and what we're actually seeing unfold from businesses and business leaders."
They went further to say: "The latter is obviously more meaningful than the former on what's in store for the economy in the medium to long term."
Later in the day, White House spokesperson Kush Desai said "industry leaders" have responded to Trump's agenda, including tariffs, "with trillions of dollars in investment commitments."
Last week, the leading US markets returned to the level observed prior to Trump's election victory in November, which investors had first applauded due to promises of tax cuts and reduced regulation.
Investors are concerned that Trump's tariffs, which are charges imposed on goods as they enter the nation, will raise costs and slow growth in the world's largest economy.
The president announced the steps after blaming China, Mexico, and Canada for not doing enough to stop the flow of illegal drugs and people into the United States. The three countries have denied the charges.
According to economist Mohamed El-Erian, investors were initially enthused about Trump's pledges for deregulation and lower taxes but underestimated the risk of a trade war.
He claimed that the recent stock market declines, which began last week, indicated the correction of those bets.
"It's a complete change in what the market expected," he continued, stressing that investors are also responding to evidence that firms and households are beginning to hold back on spending due to uncertainty, which might harm economic development.
However, Kevin Hassett, President Trump's economic adviser, has pushed back against those who predict a dismal future.
In an interview with CNBC, Hassett stated that there were numerous reasons to be hopeful about the US economy and that tariffs imposed on Canada, Mexico, and China were already driving manufacturing and jobs to the US.
"There are a lot of reasons to be extremely bullish about the economy going forward," he told reporters.
He agreed that there were some "blips in the data" for this quarter, which he blamed on the timing of Trump's tariffs and the "Biden inheritance."