US and European markets fall as Trump steps up Greenland rhetoric | Stock markets
Stock markets fell on both sides of the Atlantic as Donald Trump stepped up his rhetoric in favor of US control of Greenland.
The selloff hit U.S. stocks Tuesday, the first day of trading on Wall Street since Trump threatened new tariffs on eight European countries, after the market closed for a holiday Monday. The S&P 500 was down 1.2% while the Dow was down 1%.
The tech-heavy Nasdaq index fell 1.3%, and big tech names like Amazon, Tesla and chip designer Nvidia all fell between 2% and 3% after Wall Street opened, wiping billions of dollars from their market value.
Britain’s FTSE 100 index fell 0.8% on Tuesday, accelerating after a smaller decline on Monday and putting it on track for its biggest one-day drop since November.
In Europe, the French CAC fell by 0.7%, the German DAX by 1% and the Italian FTSE MIB by 1.1%.
The dollar was down 0.9% against a basket of currencies.
Trump’s latest threat to raise tariffs on U.S. imports of goods from Germany, France, Denmark, the United Kingdom, Sweden, the Netherlands, Norway and Finland has reignited economic uncertainty.
British Chancellor Rachel Reeves on Tuesday urged people to keep a cool head as fears grow over Trump’s Greenland efforts.
“We definitely want de-escalation,” she told Bloomberg at the World Economic Forum (WEF) in Davos. “The future of Greenland belongs to the people of Greenland. »
Trump is scheduled to deliver a speech Wednesday at the WEF in Davos.
Earlier on Tuesday, US Treasury Secretary Scott Bessent, also speaking in Davos, urged European countries not to retaliate against US tariffs announced following the Greenland crisis.
Referring to the tariffs announced by Trump in April for “liberation day,” Bessent said: “I would say it’s the same kind of hysteria that we heard on April 2.”
“What I urge everyone here to do is sit back, take a deep breath and let things play out. The worst thing countries can do is escalate their action against the United States.
But Kathleen Brooks, director of research at broker XTB, said Bessent failed to calm investors’ nerves.
“Overall, this is a man-made crisis, and the continued selloff on Tuesday suggests that U.S. threats to Greenland and their effects on financial markets could worsen if the situation does not deescalate quickly,” she said.
Gold and silver hit record highs as investors sought protection from market falls. Gold rose above $4,700 (£3,496) an ounce for the first time on Tuesday, and silver hit a new high of $95.52 an ounce.
Trump wrote in a social media post Saturday that eight European countries, including the United Kingdom, France and Germany, will face tariffs “until an agreement is reached for the complete and total purchase of Greenland.” Rates are expected to start at 10% on February 1 and reach 25% on June 1.
U.S. cruise operators are among the hardest hit by the market drop, and shares of Carnival Corp, Royal Caribbean and Norwegian Cruise Line Holdings are down 2.4%, 3.2% and 5.3%, respectively.
Trump also added even more uncertainty to global trade overnight by threatening to impose 200% tariffs on French wine and champagne after France’s Emmanuel Macron showed reluctance to join his “peace council” on Gaza.
These comments sent shares of French drinks brand owners tumbling. Luxury group LVMH – which owns Dom Pérignon, Moët & Chandon and Veuve Clicquot – fell 2.4%, and Telmont champagne owner Rémy Cointreau fell 1.5%, before recovering slightly to a 0.5% decline.
