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U.S. stock index futures plunged on Tuesday, as markets reacted sharply to President Donald Trump’s threat to impose sweeping new tariffs on several European countries over his push for U.S. control of Greenland.
By 05:25 ET (10:25 GMT), Dow Jones futures were down 750 points, or 1.5%, S&P 500 futures slid 1.6%, and Nasdaq 100 futures tumbled 1.9%.
Wall Street returns from a long weekend after closing lower last week, with the S&P 500 down 0.4%, the Dow Jones Industrial Average off 0.3%, and the Nasdaq Composite losing 0.7%.
Greenland standoff rattles markets
Investor sentiment deteriorated after Trump said over the weekend that the U.S. would impose tariffs on several European nations—starting at 10% in early February and rising to 25% by July—until a deal is reached to hand Greenland to Washington.
The president escalated his rhetoric further, threatening 200% tariffs on French wines and champagne, and declaring that “Greenland is imperative for National and World Security.” Trump confirmed he will attend the World Economic Forum in Davos this week and meet with “various parties” to discuss the issue.
European leaders swiftly condemned the threats. An emergency EU meeting is scheduled for Thursday, where officials are expected to consider countermeasures, including tariffs on up to €93 billion of U.S. goods. France and Germany have also urged the bloc to explore tools aimed at deterring economic coercion, potentially affecting U.S. investment and financial access to the EU.
Complicating matters, the U.S. Supreme Court could rule as soon as this week on the legality of Trump’s tariff authority. The administration has relied on the International Emergency Economic Powers Act (IEEPA) to justify the levies, but skepticism voiced by justices last year has fueled expectations that the court may curb those powers.
Earnings season begins with Netflix
Beyond geopolitics, markets are bracing for a fresh wave of corporate earnings. Netflix kicks off the week’s results after the closing bell, with analysts expecting earnings per share of $0.55 on revenue of $11.96 billion.
With geopolitical tensions flaring and legal uncertainty looming over trade policy, investors are entering the new week in a distinctly risk-averse mood.
