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 calling for the US to take control of Greenland.
Selling hit U.S. stocks on Tuesday, the first day of trading on Wall Street since Trump threatened new tariffs on eight European countries after the market was closed for a public holiday on Monday. The S&P 500 lost 1.2% and the Dow Jones lost 1%.
The tech-heavy Nasdaq index fell 1.3 percent, and big tech names like Amazon, Tesla and chip designer Nvidia fell between 2 percent and 3 percent after Wall Street opened, wiping billions of dollars from their market value.
Britain’s FTSE 100 index fell 0.8 percent on Tuesday, accelerating from Monday’s smaller decline, putting it on track for its biggest single-day fall since November.
In Europe, France’s CAC index fell 0.7%, Germany’s DAX index fell 1% and Italy’s FTSE MIB index fell 1.1%.
The dollar lost 0.9 percent against a range of currencies.
Trump’s latest threat to increase tariffs on US imports of goods from Germany, France, Denmark, Britain, Sweden, the Netherlands, Norway and Finland has renewed economic uncertainty.
British Chancellor Rachel Reeves on Tuesday urged people to remain calm as fears grow over Trump’s crackdown on Greenland.
“We definitely want to de-escalate,” he told Bloomberg at the World Economic Forum (WEF) in Davos. “The future of Greenland belongs to the Greenlandic people.”
Trump is scheduled to give a speech at the WEF in Davos on Wednesday.
Earlier on Tuesday, speaking in Davos, US treasury secretary Scott Bessent urged European countries not to retaliate against trade tariffs announced by the US over the Greenland crisis.
Referring to the “liberation day” tariffs announced by Trump in April, Bessent said: “I can say that this is the same hysteria we heard on April 2, there was a panic.
“I urge everyone here to sit back, take a deep breath, and let things flow. The worst thing countries can do is escalate tensions against the United States.”
But Kathleen Brooks, director of research at broker XTB, said Bessent had failed to calm investors’ nerves.
“Overall, this is a man-made crisis, and the ongoing sell-off on Tuesday suggests that if the situation does not calm down soon, US threats to Greenland and their impact on financial markets may increase further,” he said.
Gold and silver reached record levels as investors sought shelter from market declines. Gold surpassed $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 on Saturday that eight European countries, including Britain, France and Germany, would face tariffs “until an Agreement is reached for the Total and Complete acquisition of Greenland.” Tariffs are expected to start at 10% on February 1st and rise to 25% on June 1st.
U.S. cruise operators were among those hardest hit by market declines, with shares of Carnival Corp, Royal Caribbean and Norwegian Cruise Line Holdings falling 2.4%, 3.2% and 5.3%, respectively.
Trump also added further uncertainty to global trade overnight by threatening to impose 200% tariffs on French wines and champagne after it was reported that France’s Emmanuel Macron did not want to join the “peace council” in Gaza.
The comments caused shares of owners of French beverage brands to fall. Luxury group LVMH, which owns Dom Pérignon, Moët & Chandon and Veuve Clicquot, fell 2.4% and Telmont champagne owner Rémy Cointreau fell as much as 1.5% before recovering slightly to 0.5%.
