In a sign of global risk aversion, gold prices touched record highs, stocks across the world slid and US Treasuries were sold off. US markets were closed on Monday for Martin Luther King Jr Day.
Trump said on Saturday additional 10% import tariffs would take effect on Feb 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by the US.
The tariffs would increase to 25% on June 1 and would continue until a deal was reached for the US to purchase Greenland, Trump wrote in a post on Truth Social. Leaders of Greenland, an autonomous territory of Denmark, and Denmark have insisted the island is not for sale.
“Investors will be hoping for some sort of de-escalation deal on Greenland which removes the risk of a break-up or at least serious rupture in the NATO alliance. If the crisis deepens it is unlikely to spell good news for global equities,” said Russ Mould, investment director at AJ Bell.
The CBOE Volatility index, also known as Wall Street’s fear gauge, touched a two-month high at 20.61 points.
At 5:32 a.m. ET, S&P 500 e-minis were down 112 points, or 1.61%. Nasdaq 100 E-minis fell 505.25 points, or 1.97% and Dow e-minis dropped 728 points, or 1.47%.
In a busy week for data releases including third-quarter US GDP reading and January PMIs, traders will also focus on quarterly earnings reports, speeches from world leaders at Davos and a potential Supreme Court ruling on Trump’s tariffs.
Among stocks, RAPT Therapeutics soared 63.5% in premarket trading after Britain’s GSK agreed to buy the US firm for US$2.2 billion, adding global rights to the experimental food allergy drug ozureprubart to its respiratory and immunology portfolio.
US listed shares of precious metal miners such as Hecla Mining and Endeavour Silver jumped 6.3% and 4.8%, respectively, as gold prices soared past US$4,700 per ounce for the first time and silver hovered below record highs.
Netflix, which is expected to report results after markets close on Tuesday, inched up 0.6%.