U.S. stock futures declined sharply on Tuesday, reflecting investor anxiety after President Donald Trump escalated trade tensions with Europe over his push for a U.S. acquisition of Greenland. Renewed tariff threats come as the reporting season is set to accelerate.
As of 4:40 P.M. (GMT+7), Dow Jones Industrial Average futures declined by 1.62%, or 797.70 points, to 48,561.60 points, while S&P 500 futures fell by 1.77%, or 122.80 points, to 6,817.20 points. Nasdaq 100 futures also dropped by 2.22%, or 566.90 points, to 24,962.40 points
Concerns intensified after Trump’s warning that the U.S. would impose broad tariffs on imports from eight NATO nations unless those governments supported Washington’s call for a “complete and total purchase of Greenland.” The European Union has weighed potential countermeasures, including up to $108 billion in tariffs on U.S. goods and the possible activation of an “anti-coercion instrument” that could trigger U.S. asset disposals totaling $8 trillion.
According to a Truth Social post by Trump over the weekend, tariffs on European imports would commence at 10% on February 1 and rise to 25% by June 1. E.U. officials swiftly pushed back, branding the tariffs as unacceptable. Trump, who will attend the World Economic Forum in Davos on Wednesday, stated he had set talks with European leaders at the event regarding his Greenland plans.
Trump added further tension on Tuesday by proposing 200% tariffs on French wines and champagne, amid France’s resistance to joining his “Board of Peace” for Gaza. The U.S. president also criticized the U.K.’s intention to transfer sovereignty of the Chagos Islands—where one island houses a key U.S.-U.K. military base—to Mauritius, calling the decision “an act of great stupidity” and linking it to his Greenland rationale.
The overall environment rattled the fixed-income market, as the yield on the 10-year U.S. Treasury climbed to just below 4.3%. U.S. bonds tracked a broader global decline after Japanese government bond yields surged to record highs, in part due to fiscal promises from Japan’s leadership ahead of upcoming elections.
Market participants are also monitoring potential developments from the U.S. Supreme Court, which could rule on the legality of Trump’s tariffs as early as next week. Treasury Secretary Scott Bessent indicated that a reversal of the president’s trade measures remains improbable.
Meanwhile, investors are gearing up for quarterly results from major U.S. corporations, including Netflix, Intel, and Johnson & Johnson, with S&P 500 earnings forecasts projecting growth of 12% to 15% this year—though sentiment could shift if risk aversion persists.
