The week started on a sour note in Europe. With the US markets closed, European equities spent the session trying to gauge the Greenland risks: how serious is this, how far could it go, and where could it end?

Tariffs are obviously part of the story, and European companies with the highest exposure to US tariffs took the biggest hit. That familiar group from last year was back in focus — German carmakers, for example, and French luxury houses like Louis Vuitton, which slid more than 4% on Monday.

The US was closed, but futures traded down. Nasdaq futures underperformed S&P and Dow futures, amid concerns that Big Tech could become Europe's target in the trade war.

US Treasuries joined Monday's selloff this morning. The US 10-year yield jumped past 4.25% on renewed tariff uncertainty and rising rumours that Europeans could "weaponize their US assets" — yes, weaponize is the word being used — to retaliate against Mr Trump's aggressive trade and geopolitical policies.

Europeans hold roughly $10 trillion in US assets: around $6 trillion in US equities and roughly $4 trillion in Treasuries and other bonds. Selling those assets would pull the rug from under US markets — and because Mr Trump is highly focused on Wall Street, it could maybe get his attention. But make no mistake: this would mean European investors — private and public — willingly accepting financial pain to punish the US. And right now, with a cost-of-living crisis, an ageing population, and a clear lag in technological progress, it's hard to imagine investors voluntarily dumping their US holdings. Would you really give up your Nvidia shares to buy Louis Vuitton? Tough choice.

US futures suggest that Wall Street will follow Europe lower when trading resumes on Tuesday. Technology will be in focus — not only because Europe could retaliate by targeting US tech companies, but also because earnings season is about to get going, with Netflix reporting after the bell. Netflix is not an AI story and has lost relevance for broader market sentiment, but the rest of Big Tech will follow in the coming weeks.

Geopolitical risks are now being added to an already long list of AI risks: circular deals, over-leveraged investments, delayed returns on investment, and rising metal and memory-chip prices.

As I've been saying, if you like tech, there are plenty of tech stocks outside the US — and they're doing just fine. The Korean Kospi index has risen in every single trading session since the start of the year. Every one of them. Memory-chip makers, in particular, are benefiting from supply tightness, which allows them to raise prices aggressively. Without memory chips, very little else in technology works.

And from a European perspective, one can't help but wonder: could ASML — the only supplier of EUV lithograph— be "weaponized" too?

Beyond tech, one group stood out: miners — especially gold miners — as gold prices pushed to fresh highs. Gold is trading above $4'700 an ounce this morning, while silver is consolidating just below $95 an ounce.

Fresnillo jumped more than 6.5% in London to a fresh record high, adding over 250 points to the FTSE 100 on its own. Endeavour (another gold miner) and Antofagasta (a copper miner) added roughly another 150 points combined, helping the UK blue-chip index outperform its European peers.

There's little doubt that if gold continues to rally — and it's hard to see what would reverse it when the headlines are this absurd — mining stocks will likely keep rising. Buying gold as a way to defy the US has become a theme (the debasement trade).

But caution is warranted: some mining valuations are starting to look stretched. Fresnillo now trades on a P/E of around 76. This is not tech. Supply is limited, so most upside must come from price increases alone. A 76x earnings multiple simply doesn't make sense. Endeavour's P/E, at around 18, already looks elevated for a miner. For context, diversified miners like BHP, Rio Tinto, or Glencore typically trade on roughly 6–10x earnings, while precious-metal miners tend to sit closer to 8–15x. Above that, things start to look overheated.

Coming back to the uglier global questions: is this shaping up to be another TACO trade? Optimists argue that the Greenland saga is just another example of the now-familiar US negotiating tactic — punch first, talk later.

But when you consider the possibility of three more years of this, diversification starts to look like the obvious answer. Diversifying away from the US — and perhaps from US tech — might be prudent if this "Season of the Stupidest Trade War in the World History" pushes Europeans to lose patience and slap tariffs on US technology.

The problem is: where do you go? Let's be honest, despite existing Asian alternatives, the US Big Tech's appeal is hard to replicate elsewhere, and the deep integration and near-monopolistic nature of US tech services means Europe can't really afford to lose them either.

Americans know — as well as you and I do — that if US tech were to leave Europe, there would be two choices: go with China – replace WhatsApp with WeChat and experience the joys of a mega-app — along with mysteriously disappearing messages? Or simply have no tech at all. No WhatsApp, no Word, no Excel, no social media. Back to SMS, MMS — maybe even fax.

My guess: a market selloff may be brewing, but a 15–20% pullback could once again be followed by another wave of TACO trades. Then we count down three more years, hoping the damage being done among Western allies doesn't last longer than that.

Source: Swissquote Bank SA