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European Markets Rebound as Asia Recovers from Sell-Off
European markets opened higher on Tuesday with Germany’s DAX, France’s CAC 40, and London’s FTSE 100 all showing gains after a significant sell-off on Monday.
Japan’s benchmark Nikkei 225 index soared nearly 11% on Tuesday, recovering from a sharp drop that had contributed to a global market slump on Monday. Other Asian markets also saw a rebound, though to a lesser extent, indicating a stabilization after the week’s turbulent start.
Monday’s market plunge was reminiscent of the 1987 crash, sparking fears of a slowing US economy. The Nikkei gained nearly 11% early Tuesday and was trading 10.3% higher by early afternoon as investors sought bargains after the previous day’s 12.4% drop. On Monday, the S&P 500 dropped 3%, marking its worst day in nearly two years, closing at 5,186.33. The Dow Jones Industrial Average fell by 1,033 points, or 2.6%, to 38,703.27, while the Nasdaq composite slid 3.4% to 16,200.08 as major tech companies like Apple and Nvidia experienced significant losses.
The global sell-off that began last week was further fueled by a report showing a slowdown in US hiring, raising concerns that the Federal Reserve’s prolonged high interest rates might be stifling the economy too severely. A report from the Institute for Supply Management on Monday showed slight growth in US services businesses, particularly in arts, entertainment, recreation, accommodations, and food services.
Professional investors cautioned that technical factors might have amplified the steep losses. South Korea’s Kospi index dropped 8.8% on Monday, and Bitcoin fell below $54,000 from over $61,000 on Friday. Even gold, typically a safe haven during market turmoil, slipped about 1%.
On Tuesday, nearly all Asian markets, except Singapore, saw gains. The Kospi jumped 4.3% to 2,546.64. Hong Kong’s Hang Seng index rose 0.5% to 16,775.65. Australia’s S&P/ASX 200 edged 0.3% higher to 7,677.50. Taiwan’s Taiex gained 1.2% after an 8.4% drop the day before. The Shanghai Composite index, which had largely bypassed Monday’s turmoil, was up slightly to 2,861.87.
The dramatic market moves reflect fears that the US economy might be harmed by the Federal Reserve’s high interest rates, leading to speculation about a possible emergency rate cut. The yield on the two-year Treasury, closely tied to Fed expectations, briefly sank below 3.70% on Monday before recovering to 3.89%.
“The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management, noting that such actions are usually reserved for emergencies.
Despite the recent declines, the US economy is still growing, and a recession is not certain. The stock market remains up significantly for the year, with double-digit gains for the S&P 500, Dow, and Nasdaq Composite.
Other factors contributing to Monday’s market plunge include the Bank of Japan’s recent interest rate hike, which led to a stronger yen and impacted global trading strategies. Big Tech companies, particularly those involved in artificial intelligence like Nvidia, saw sharp declines amid fears that their stock prices had risen too quickly.
In commodities, early Tuesday saw US benchmark crude oil up $1.18 to $74.12 per barrel, and Brent crude rising $1.00 to $77.30 per barrel. The euro edged up to $1.0956 from $1.0954.
As markets continue to react to economic data and global events, the path forward remains uncertain, but Tuesday’s gains suggest a temporary stabilization after a volatile start to the week.
News
Chile Holds Presidential Election Amid Crime and Immigration Debate
Chile is holding its presidential election on Sunday, with candidates campaigning on tough stances on crime and immigration. The vote comes four years after progressive Gabriel Boric was elected, at a time when the electorate is deeply divided and a new compulsory voting law adds an element of uncertainty.
Over 14 million Chileans are eligible to vote in the elections, which will also renew the entire Chamber of Deputies and nearly half of the Senate. Security and immigration concerns have dominated the campaign, shifting public attention toward conservative candidates. Evelyn Matthei has called for drug traffickers to be “in jail or in the cemetery,” while Franco Parisi described drug trafficking as “narco-terrorism” and advocated for “bullet or jail.”
The three main contenders offer contrasting visions for Chile’s future. José Antonio Kast, 59, a Republican Party member and the brother of a former minister who served under General Augusto Pinochet, is running for president for the third time. He has focused his campaign on combating crime and illegal immigration. Jeannette Jara, 51, a former minister in Boric’s government and member of the Communist Party, has pledged to expand pensions, lower electricity costs, and construct tens of thousands of new homes. Johannes Kaiser, 49, a former YouTube commentator and legislator, has questioned vaccination programs, opposed abortion, and promised to withdraw Chile from climate agreements and the Inter-American Court of Human Rights.
The introduction of compulsory voting in 2023 could significantly affect turnout, particularly among younger voters. Generation Z, born after 1996, accounts for roughly a third of the electorate, and polls suggest that 30% of these voters have yet to decide. Social media has played a major role, with candidates using platforms like TikTok to mobilize supporters. Jara and Matthei have accused Kast of orchestrating social media campaigns against them, allegations he denies.
Polls indicate a close race. Latest surveys show Jara leading with 30% support, followed by Kast at 22% and Kaiser at 15%. Prediction markets, however, see Kast as the frontrunner with a 70% chance of winning. Analysts suggest that none of the candidates is likely to secure an absolute majority on Sunday, making a run-off election probable on 14 December, likely between Jara and Kast.
A conservative or far-right advance could also reshape the legislative landscape. Polls suggest that both coalitions might achieve a majority in Congress, raising the possibility of a government with limited parliamentary opposition—a scenario not seen in Chile in the past 15 years.
Polling stations opened at 8:00 local time (UTC-4) and will close at 18:00. With crime, immigration, and economic issues at the forefront, this election is being closely watched as a test of Chile’s political direction in a highly polarized environment.
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Trump Orders Justice Department Probe Into Epstein Ties With Clinton, Other Democrats
Former US President Donald Trump has directed Attorney General Pam Bondi to launch an investigation into connections between convicted sex offender Jeffrey Epstein and several prominent Democrats, including former President Bill Clinton. The move follows the release of new emails by Congress showing Epstein’s communications with influential figures in the US and abroad.
The emails, released Wednesday by the House Oversight Committee, stem from Epstein’s personal accounts and reveal interactions with lawmakers, business leaders, and other high-profile individuals. Trump accused the Democratic Party of attempting to revive what he called the “Epstein hoax” to distract from policy failures and political setbacks, including a recent government shutdown.
“Epstein was a Democrat, and he is the Democrat’s problem, not the Republican’s problem,” Trump said in a statement on social media. He also referenced Clinton, former Treasury Secretary Larry Summers, and LinkedIn founder and major Democratic donor Reid Hoffman, asserting that they had close ties to Epstein.
Trump confirmed that he had instructed Bondi to investigate Epstein’s connections with Clinton, Summers, Hoffman, and financial institutions such as J.P. Morgan Chase. “I will be asking A.G. Pam Bondi, and the Department of Justice, together with our great patriots at the FBI, to investigate Jeffrey Epstein’s involvement and relationship with Bill Clinton, Larry Summers, Reid Hoffman, J.P. Morgan, Chase, and many other people and institutions, to determine what was going on with them, and him,” Trump said.
Clinton has denied any wrongdoing or awareness of Epstein’s criminal activities. J.P. Morgan Chase also issued a statement expressing regret over any association with Epstein, emphasizing that it had ended relations with him years before his arrest. “We regret any association we had with the man, but did not help him commit his heinous acts,” said Patricia Wexler, a spokesperson for the bank.
Bondi announced via social media that she had appointed Jay Clayton, U.S. Attorney for the Southern District of New York, to oversee the investigation. “Clayton is one of the most capable and trusted prosecutors in the country, and I’ve asked him to take the lead,” she said, noting that the Department of Justice would conduct the inquiry with “urgency and integrity.”
The announcement comes a week before the House of Representatives is set to vote on whether the Justice Department should release all files related to Epstein, who died by suicide in a federal prison in 2019 while awaiting trial on sex-trafficking charges. Republican Congresswoman Marjorie Taylor Greene urged Trump to ensure that House Republicans vote in favor of releasing the documents, calling failure to do so a “huge miscalculation.” Greene and four other House Republicans have already filed a discharge petition, which has garnered 218 signatures, seeking the public release of all Epstein-related records.
The investigation highlights ongoing scrutiny of Epstein’s network and connections to prominent political and financial figures, as well as continuing debates over transparency and accountability in Washington.
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US Nuclear Weapons in Germany Raise Security Questions Amid Rising Global Tensions
As the Bundeswehr marks its 70th anniversary in Berlin, the celebration is shadowed by growing anxiety over Germany’s security. Around 20 US nuclear weapons are currently stored in the country—modernised, ready for use, and symbolic of Washington’s longstanding commitment to Europe’s defence. Yet experts warn that this deterrent may not guarantee protection if the United States hesitates to act in a crisis.
The weapons, believed to be B61-12 hydrogen bombs stored at Büchel Air Base in Rhineland-Palatinate, can be deployed by fighter jets such as the Eurofighter. Their destructive capacity remains immense. The bombs form part of the US nuclear umbrella extended to NATO allies since the Cold War, but concerns have deepened over the reliability of that shield under President Donald Trump, who has questioned aspects of NATO’s mutual defence commitments.
“It has never been and cannot be certain that the US will actually deploy nuclear weapons. It is not a guarantee. But the important thing is that the enemy cannot rule it out,” said political scientist and security expert Karl-Heinz Kamp, a former president of the Federal Academy for Security Policy and an associate fellow at the German Council on Foreign Relations. “Deterrence is pure speculation. It has held up so far, for 50 years.”
Reports from several US media outlets suggest that the United States brought new nuclear weapons to Europe over the summer, with signs including flight paths and the delivery of F-35 fighter jets designed to carry tactical nuclear weapons. Germany has also ordered a fleet of F-35s, expected to arrive in 2026.
Since the invasion of Ukraine in 2022, nuclear deterrence has returned to the forefront of European security debates. Russian President Vladimir Putin has repeatedly brandished nuclear threats, touting his arsenal of about 5,500 warheads and showcasing intercontinental missiles such as the RS-24 “Yars.” Kamp noted that while Putin uses nuclear rhetoric as a political tool, actual deployment remains unlikely. “Whoever shoots first, dies second. That is not a desirable state of affairs,” he said.
Still, questions persist about whether US nuclear weapons in Germany could be relocated to NATO’s eastern flank, including the Baltic states, Poland, or Romania, as a stronger warning to Moscow. Kamp acknowledged this possibility, calling such a move a potential “signal to Russia.”
Anti-nuclear groups, including ICAN Germany, continue to demand the withdrawal of US weapons from German territory, arguing that they make the country a target rather than a protectorate.
While some analysts argue that Germany could technically produce its own nuclear arsenal, Kamp described the idea as politically untenable given Germany’s post-war commitments. The nation is bound by the 1990 Two Plus Four Treaty and the 1969 Nuclear Non-Proliferation Treaty, both of which prohibit it from developing nuclear weapons.
Public opinion also stands firmly against the idea. Only about a third of Germans support developing domestic nuclear arms. For now, Germany’s security remains anchored within NATO, protected not only by the United States but also by the nuclear capabilities of France and the United Kingdom.
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