A look at the day ahead in European and global markets by Gregor Stuart Hunter.

U.S. President Donald Trump has issued a stern warning to global trade partners, urging them not to “play games” by backing out of recently negotiated trade agreements after the U.S. Supreme Court struck down his emergency tariff measures.

The ruling has created fresh uncertainty in global markets, with several countries now questioning whether previously agreed terms will remain intact. While Trump signaled a tough stance, some foreign governments are seeking clarity rather than confrontation.

Japan is looking for assurances that its treatment under a revised U.S. tariff regime will remain as favorable as the agreement reached last year. Meanwhile, Taiwan has requested confirmation from Washington that the beneficial terms it secured will not be altered following the court’s decision.

President Trump is expected to adopt a combative tone during his annual State of the Union address later on Tuesday. Analysts suggest he may directly criticize some of the Supreme Court justices following the legal setback.

Adding to the geopolitical tensions, China announced on Tuesday that it would prohibit exports of dual-use goods to 20 Japanese entities with alleged military ties. Beijing stated the move was aimed at curbing what it described as Japan’s “remilitarisation.”

Despite the political friction, markets in Asia reacted positively. Investors appeared encouraged by the prospect of lower U.S. tariffs after the Supreme Court decision. Japan’s Nikkei 225 and China’s CSI 300 index both rose more than 1% as trading resumed following local holidays.

Elsewhere in Asia, markets stabilized after Monday’s selloff on Wall Street, which some analysts linked to a pessimistic report from Citrini Research warning about potential long-term disruptions from artificial intelligence. U.S. S&P 500 e-mini futures recovered slightly, rising 0.3%.

Technology-related stocks continued to perform strongly, particularly among companies linked to the AI supply chain. Benchmarks in Taiwan and South Korea reached fresh highs, pushing MSCI’s broadest Asia-Pacific index outside Japan to a new record.

In early European trading, pan-European futures were up 0.3%, German DAX futures gained 0.2%, while FTSE futures slipped 0.1%.

Key Developments to Watch on Tuesday

Company Earnings:

• Home Depot

• Workday

• Telefonica

• Endesa

Economic Data:

• France: February business confidence

Debt Auctions:

• United Kingdom: 7-year government bond sale

Global markets remain sensitive to developments surrounding U.S. trade policy, geopolitical tensions in Asia, and the evolving outlook for artificial intelligence’s impact on the global economy.