Stock markets fell and gold hit a record high of $3,501.59 an ounce Tuesday as investors fled to safe havens over concerns about US president Donald Trump鈥檚 Federal Reserve fight, tariffs uncertainty and Europe鈥檚 public finances.
Wall Street鈥檚 main indexes opened sharply in the red as investors returned from the Labour Day holiday while European stock markets were down in afternoon deals.
The borrowing costs of the United States, France and Britain rose as the yield on their sovereign bonds jumped.
鈥楽eptember can be a strange month for financial markets, as stocks historically tend to underperform,鈥� noted Kathleen Brooks, research director at XTB traders.
鈥楬owever, a selloff in the bond market and a rush to the dollar and gold are signs that investors are rushing into safe havens and liquid assets,鈥� she added.
Gold reached $3,501.59 an ounce Tuesday, beating its previous record of $3,500.10 in April.
In the United States, investors were watching developments in Trump鈥檚 bid to oust Fed Governor Lisa Cook, with a court hearing her challenge on Tuesday.
The case has major implications for the US central bank and its independence.
鈥業nvestors are increasingly concerned about president Trump鈥檚 interference with the running of the US Federal Reserve,鈥� said David Morrison, senior market analyst at financial service firm Trade Nation.
Analysts also cited concerns over Trump鈥檚 tariffs campaign after a court on Friday ruled that many of his duties were illegal because he did not have authority to impose them.
The court, however, allowed the tariffs to stay in place through mid-October, allowing the parties to take the case to the Supreme Court.
鈥楾his combination of tariff uncertainty, Fed concerns, and seasonal weakness left markets on edge as the month began,鈥� Morrison said.
The yield on 30-year Treasury bonds rose to almost five per cent.
The dollar, however, rallied against the euro and British pound as French and UK government borrowing costs hit multi-year highs.
France鈥檚 long-term borrowing cost jumped to its highest level since the eurozone debt crisis in 2011 as investors fret over a confidence vote next week that could topple the minority government.
The yield on 30-year government bonds topped 4.5 per cent ahead of Monday鈥檚 vote, which was called by prime minister Francois Bayrou to settle a budget fight but which he is tipped to lose.
The yield on 30-year UK government bonds hit the highest level since 1998 owing to worries over Britain鈥檚 struggling economy.
Elsewhere, oil prices soared on stalled peace negotiations between Ukraine and major energy producer Russia, according to analysts.
On the corporate front, shares in Nestle retreated around one per cent after the Swiss food giant sacked chief executive Laurent Freixe, citing an undisclosed romantic relationship with a direct subordinate.