A look at the day ahead in European and global markets from Stella Qiu

Donald Trump did it again. Out of the blue, the U.S. President declared that he was raising tariffs on South Korea to 25%, from 15%, for not enacting the trade deal agreed last July. That affects autos, lumber and pharma, yet stocks there jumped 2% to record highs anyway.

Initially, South Korea's KOSPI .KS11 did fall over 1%, but that just lured buyers looking for exposure to Asia's best-performing market of 2025. With its Industry Minister heading to the U.S. soon, there is every chance of de-escalation, and traders were again betting on TACO - Trump always chickens out.

Of course there is little surprise Seoul isn't rushing to invest hundreds of billions in the U.S., when the threat of random tariffs is a permanent feature of the Trump administration.

The tariff uncertainty did add to the appeal of precious metals, with gold and silver charging back towards their record highs. Gold XAU= climbed 1% to $5,063 an ounce, while silver XAG= vaulted 5% to $109 an ounce.

Stocks in Asia were generally upbeat amid hopes that blockbuster earnings from the so-called U.S. Magnificent Seven, starting with Meta META.O, Microsoft MSFT.O and Tesla TSLA.O on Wednesday, will help extend the bull market into 2026.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rallied 1% to a new record high. Even Japan's Nikkei .N225 gained 0.7% despite the yen holding near the strongest level in over two months, which would normally be considered a negative for its exporters.

European bourses are headed for a stronger open, with EURO STOXX 50 futures STXEc1 up 0.3%. Nasdaq futures NQc1 gained almost 0.6%, while S&P 500 futures edged up 0.3%.

Next up, it is looking light on the global economic calendar until the Federal Reserve policy decision on Wednesday where no move in interest rates is expected.

However, the meeting will be overshadowed by a DOJ investigation into Chair Jerome Powell, which should make for an interesting press conference afterwards. If Powell floats the idea of not stepping down as a governor in May, as he is entitled to do under Fed rules, how Trump reacts is anybody's guess.

Key developments that could influence markets on Tuesday:

-- Earnings from LVMH Moet Hennessy Louis Vuitton and Christian Dior

-- U.S. ADP Weekly Employment Change, Conference Board January Consumer Confidence

(Editing by Shri Navaratnam)

((Stella.Qiu@thomsonreuters.com))