America First Is Sinking Stocks and Currencies Everywhere Else

Whether you ascribe it to concerns about inflation, or the threat of Donald Trump’s tariffs and tax-cut plans — it all amounts to the same thing: pressure on almost every market outside the US.

Investors are saying that Trump's policies will be inflationary and may cause the Fed to err on the side of caution with further interest rate cuts. It's striking that the market is close to 50/50 on a December rate cut now and only looking for two reductions through June, against almost four seen at the start of last week.

And the impact is starting to cause fissures across the rest of the world. An MSCI gauge of global stocks excluding the US is at its lowest in three months. The emerging-market index is suffering its worst four days since early August. Philippines stocks are entering a correction, those in South Korea are at a one-year low. The Stoxx Europe 600 Index also took it on the chin yesterday.