• U.S. stock futures fell significantly after Trump's tariff threats against eight European nations.
• European markets reacted negatively, indicating fears of a broader transatlantic trade conflict.
• Gold and silver prices jumped as investors sought safety amidst tariff uncertainties.
• European leaders condemned the tariff threats, describing them as economic coercion.
• Data on U.S. inflation and consumer spending may influence future Federal Reserve decisions.

U.S. stock futures experienced significant drops after President Donald Trump threatened to impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain. This decision stems from backlash regarding U.S. attempts to purchase Greenland, a move that has heightened tensions between the U.S. and its European allies. Specifically, S&P 500 futures fell by 0.9% while Nasdaq futures were down 1.1%, all amid thin trading due to the closure of U.S. equity and bond markets for the holiday, according to Reuters and India Times.

European markets echoed the sentiment of uncertainty, with major indices declining sharply; Germany's DAX fell 1.3% while France's CAC 40 dropped 1.9%. Traders are concerned that Trump's tariffs may signal a wider transatlantic trade conflict, undermining investor confidence in the already strained relations. Trump's threats have prompted strong criticism from European leaders, who labeled them as "economic coercion," complicating ongoing diplomatic interactions, as reported by Los Angeles Times and Reuters.

As a consequence of the tariff threats, safe-haven assets like gold and silver climbed significantly, with gold rising about 1.7% to $4,671 an ounce, as investors sought safety amidst market turbulence. Analysts indicated that in addition to tariffs, the potential for a larger geopolitical friction could lead to more pronounced market disruptions. Oil prices also faced pressure, settling down over fears that a full-blown trade war could severely impact global demand for oil, according to India Times and Reuters.

Investors globally are now focusing on upcoming economic data from the U.S., including delayed reports on core inflation and consumer spending which are due on Thursday. These insights are crucial as they could help shape expectations for potential interest rate cuts by the Federal Reserve, which is closely monitoring market responses to the current economic climate. The market has largely priced in no rate cut until at least June, especially following a flurry of strong economic data, as outlined by Los Angeles Times and India Times.