Leading European and Asian markets closed the day with hefty losses, with both Frankfurt and Paris falling more than 2% and Hong Kong finishing nearly 3% lower.
Chinese stocks were already under pressure after disappointment about Beijing’s lack of extra measures to boost China’s stuttering economy.
Trump’s support for cryptocurrency pushed bitcoin to a record high of almost $90,000 (NZ$151,900) at one point on Tuesday.
Trump’s decision to pick China hawks for key positions in his cabinet has added to fears that the next few years could be bumpy for global markets.
“The latest moves from Trump’s camp... are sending chills through the markets and casting a decidedly icy glow on US-China relations,” noted independent analyst Stephen Innes.
Analysts are also expecting tariffs on European imports, hurting the region’s top stock markets.
The dollar extended gains against its peers that started after news of Trump’s election, which has sparked bets on a pick-up in inflation that could complicate the Federal Reserve’s plans to lower US interest rates.
The latest reading of the US consumer price index due Wednesday will be closely watched as investors try to ascertain the central bank’s plans for next month’s monetary policy meeting.
“We assume the Trump administration will deliver on their key policy proposals with the degree and timing of these policies the bigger uncertainty,” said National Australia Bank’s Rodrigo Catril.
“Most of these policies [lower taxes, tariffs, immigration, deregulation, unfunded expansionary fiscal policy] can be regarded as pro-growth and or inflationary,” he continued.
“This means, all else equal, a shallower Fed easing cycle and a stronger dollar,” he added.
Key figures around 21.15 GMT/10.15 NZT:
New York - Dow: DOWN 0.9% at 43,910.98 points (close)
New York - S&P 500: DOWN 0.3% at 5983.99 (close)
New York - Nasdaq Composite: DOWN 0.1% at 19,281.40 (close)
London - FTSE 100: DOWN 1.2% at 8025.77 (close)
Paris - CAC 40: DOWN 2.7% at 7226.98 (close)
Frankfurt - DAX: DOWN 2.1% at 19,033.64 (close)
Tokyo - Nikkei 225: DOWN 0.4% at 39,376.09 (close)
Hong Kong - Hang Seng Index: DOWN 2.8% at 19,846.88 (close)
Shanghai - Composite: DOWN 1.4% at 3421.97 (close)
Dollar/yen: UP at 154.59 yen from 153.81 yen on Monday
Euro/dollar: DOWN at $1.0625 from $1.0648
Pound/dollar: DOWN at $1.2748 from $1.2872
Euro/pound: UP at 83.34 pence from 82.73 pence
Brent North Sea Crude: UP 0.1% at $71.89 per barrel
West Texas Intermediate: UP 0.1% at $68.12 per barrel
© Agence France-Presse
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