Stock futures indicated a downward trend for Wall Street on Tuesday morning, following strong rhetoric from President Donald Trump regarding Greenland. He has threatened to impose new tariffs on countries resisting the sale of the Danish territory to the United States.
Futures data suggested a substantial drop, with the Dow Jones Industrial Average forecasted to open down approximately 630 points. The S&P 500 was expected to lose around 93 points, translating to a decline of about 1.3%, while the Nasdaq was anticipated to drop approximately 405 points, or 1.6%.
In a Truth Social post over the weekend, Trump declared that imports from eight NATO countries would face rising tariffs, starting at 10% on February 1 and increasing to 25% by June 1. This tariff imposition would remain “until such time as a Deal is reached for the Complete and Total purchase of Greenland.”
Trump also issued a new threat of 200% tariffs on French wines and champagne, specifically in response to French President Emmanuel Macron’s refusal to join his proposed “Board of Peace” for Gaza. Furthermore, the U.S. President criticized the U.K. government’s plan to cede sovereignty of the Chagos Islands to Mauritius, branding it an “act of great stupidity” and linking it back to national security concerns related to Greenland’s acquisition.
European leaders have reacted strongly against Trump’s fresh tariff threats, labeling them “unacceptable” and are reportedly considering countermeasures. France is advocating for the European Union to invoke the “Anti-Coercion Instrument,” its strongest potential economic response. Share prices of European carmakers and luxury goods have already begun to decline, whereas some defense stocks have seen a rise.
As Trump prepares to address the World Economic Forum in Davos, Switzerland, he mentioned planning discussions with European leaders regarding his Greenland initiative. Investors are on high alert, especially after the U.S. market had been closed for Martin Luther King Day.
Deutsche Bank’s Jim Reid noted that with the market closed yesterday, the impact of the tariff threats had not yet fully circulated through financial markets, hinting at the potential for larger shifts should the rhetoric escalate further. Reid referenced Trump’s ambiguous response regarding the use of force to acquire Greenland, which has sparked fears of retaliatory trade measures from European nations.
Despite the concerns surrounding tariffs, Jeff Kilburg, CEO of KKM Financial, suggested that investors may find buying opportunities in the dips resulting from tariff fears, indicating that attention would shift back to the companies’ Q4 earnings releases.
Additionally, the administration’s tariff strategies will be closely examined as the Supreme Court is expected to rule soon on the legality of the Trump tariffs imposed under the International Emergency Economic Powers Act. Treasury Secretary Scott Bessent expressed skepticism that the court would overturn such significant economic policies.
Global investor sentiment was also affected by civil unrest in Iran, where an official reported that over 5,000 individuals have died during protests linked to economic struggles and calls for an end to clerical governance.
Amid these developments, major U.S. indices are coming off a week of losses, with the S&P 500 down 0.4%, the Dow Jones down 0.3%, and the Nasdaq declining 0.7%. This week promises to be significant, with quarterly earnings reports expected from several major companies—including Netflix, Charles Schwab, Johnson & Johnson, and Intel—crucial for maintaining positive sentiment in the U.S. stock market. Analysts anticipate an earnings growth of 12% to 15% for the S&P 500, which could bolster investor confidence moving forward.