US stocks opened with heavy losses early Tuesday following President Trump's renewed trade-war threats against Europe concerning Greenland. A sell-off in Japanese bonds added pressure across global markets.
The Dow Jones Industrial Average dropped roughly 1.5%, or over 700 points. The S&P 500 sank 1.4%, and the Nasdaq Composite retreated 1.6% as investors moved away from riskier assets. This came after a losing week for Wall Street.
Over the weekend, Trump stated that eight NATO countries would face additional import duties of 10% unless the United States secured a deal to purchase the Danish territory. On Monday, he intensified his pursuit of Greenland. The European Union discussed $108 billion in retaliatory tariffs and a potential "anti-coercion instrument" that could impact US assets by an estimated $8 trillion.
Also on Monday, Trump threatened to impose a 200% import tariff on French wines after President Emmanuel Macron declined an invitation to join a "Board of Peace."
European Commission leader Ursula von der Leyen warned Tuesday that the EU's response would be "unflinching, united, and proportional," maintaining high tensions.
Treasury yields climbed to their highest levels in four months amid the global bond sell-off. The US dollar fell to a two-week low, while gold and silver prices reached new record highs as investors sought safe havens.
Attention is shifting to the World Economic Forum in Davos, where Trump is reportedly scheduled to hold a meeting regarding the Greenland situation. He is set to deliver a key address on Wednesday.
The Supreme Court could rule as early as this week on the constitutionality of Trump's use of emergency powers to impose broad tariffs.
Investors are also preparing for a busy earnings period. Netflix is due to report results after the market closes Tuesday. Its stock edged up in premarket trading after amending its bid for Warner Bros. Discovery's studio to an all-cash offer.