Financial Contagion in Stock Markets in the Era of the Russian-Ukraine War, Trump Tariff Dispute, and COVID-19 Uncertainties

Abstract This study employs nonlinear time-varying correlation methodologies to analyze high-frequency stock market data for a group of developed and emerging markets between December 16, 2019, and July 31, 2025, amid uncertainties related to politics, geopolitics, trade, and the COVID-19 pandemic. COVID-19, the Russia-Ukraine war, and uncertainties surrounding US President Trump's second term have become a new type of systematic risk for stock market participants globally, leading to weaker external demand and fragile financial markets. We identify a substantial increase in correlation among certain country pairs during the coronavirus crisis, indicating heightened contagion. In contrast, trade-policy-based shocks during the Trump tariff period lead to more heterogeneous and region-specific responses. Volatility transmission is shaped not only by financial globalization but also by the nature of each shock and the underlying structure of each market. These results offer important insights for international investors, policymakers, and risk managers, particularly regarding diversification, crisis response, and the design of resilient financial systems. JEL: G01, G15, C52