Stock futures pointed to weaker trading on Wall Street on Tuesday morning as President Donald Trump stepped up his rhetoric on Greenland and threatened to impose new tariffs on countries that oppose the sale of the Danish territory to the United States.
Futures data last indicated an implied open for a 630 point decline. Dow Jones Industrial Average. of S&P500 is poised to fall 93 points, or about 1.3%, while the implied open is Nasdaq Last time, it pointed out a decline of 405 points (1.6%).
In a post on Truth Social on Saturday, President Trump announced that U.S. imports from eight NATO members would face increased tariffs “until we reach an agreement on the full and comprehensive purchase of Greenland.” President Trump said tariffs would start at 10% on February 1st and increase to 25% on June 1st.
Trump on Tuesday threatened to impose 200% tariffs on French wine and champagne, following reports that the country’s President Emmanuel Macron was reluctant to join the so-called Gaza Peace Commission. Trump also criticized Britain, calling its plan to hand over sovereignty over the Chagos Islands, one of which is the site of a British-American military base, to Mauritius as “a very foolish move.” He said the move was “another in a long line of national security reasons why we must acquire Greenland.”
The Trump administration previously supported the UK-Mauritius agreement.
European leaders have said President Trump’s threat of new tariffs is “unacceptable” and are reportedly considering countermeasures, with France said to be urging the European Union to use its strongest economic countermeasures, known as “anti-coercion measures.” Shares of European automakers and luxury goods companies fell on Monday, while some of the continent’s defense stocks rose.
President Trump, who is scheduled to speak at the World Economic Forum in Davos, Switzerland, on Wednesday, said he had agreed to meet with European leaders there to discuss his ambitions for Greenland.
Back in the United States, the first time investors were able to fully react to the trade escalation was Monday night, as markets were closed for the Martin Luther King Jr. holiday.
“Due to the US armistice yesterday, the impact of the threat of tariffs on Greenland had not yet fully permeated financial markets,” Deutsche Bank’s Jim Reid said in a note Tuesday morning. “Markets are reacting, but it’s clear there’s room for more movement if the rhetoric becomes more intense…Yesterday, when asked in an interview with NBC News, “No comment,” Trump did not rule out using force to take Greenland. This has raised concerns about some kind of retaliatory trade escalation from Europe, prompting strong comments from several officials. ”
But Jeff Kilberg, CEO of KKM Financial, believes investors should buy on the edge if the stock price falls on tariff concerns. “The market’s initial reaction to potential tariffs presents a buying opportunity as attention shifts from Davos and returns to Q4 earnings season midweek.”
The administration’s levy is also under scrutiny as Wall Street awaits a major court ruling.
The Supreme Court could rule as early as next week on whether to repeal Trump tariffs imposed by the president under the International Emergency Economic Powers Act. Treasury Secretary Scott Bessent said Sunday that it is “very unlikely that the Supreme Court will overturn the president’s flagship economic policy.”
“In general, we expect much of the policy uncertainty, particularly related to tariffs, to resolve. Nevertheless, we should expect policy-related volatility to continue, including in the headlines over the weekend,” Scott Kronert, Citi’s head of U.S. equity strategy, wrote to clients.
The civil war in Iran is also alarming investors around the world. Iranian officials in the region announced Sunday that at least 5,000 people had been killed in nationwide protests. The protests began on December 28, citing economic hardship, and have since grown into widespread demands for an end to clerical rule.
Major U.S. stock averages are coming off a down week.
of S&P500 30 stocks fell 0.4%. Dow Jones Industrial Average It fell 0.3% for the week. of Nasdaq Composite Semiconductor manufacturing stocks tied to artificial intelligence trading posted a 0.7% loss despite a brief rally on Thursday. Taiwan Semiconductor Explosive 4th quarter report.
This week, quarterly earnings will be announced from a variety of companies, including: Netflix, charles schwab, johnson & johnson and intel. Corporate guidance this year will be critical to maintaining the bullish trend in U.S. stocks. of S&P500 is already expected to deliver 12% to 15% profit growth.
— CNBC’s Fred Imbert contributed reporting.
