US stocks suffered heavy losses on Tuesday after President Donald Trump stepped up his rhetoric on Greenland, threatening to impose new tariffs on countries that oppose the sale of the Danish territory to the United States.
U.S. Treasury yields rose sharply and the U.S. dollar fell as Trump’s threat sparked a flight from U.S. assets. Danish pension operator AkademikerPension said on Tuesday it was exiting US government bonds due to financial concerns over US debt.
The Dow Jones Industrial Average fell by 840 points, or about 1.7%. The S&P 500 fell 2% and the Nasdaq Composite fell 2.5%. The day’s losses sent the S&P 500 and Nasdaq lower for the year, with the former down nearly 1% and the Nasdaq down 1.2%. The Cboe Volatility Index (VIX) – Wall Street’s “fear gauge” – jumped to a high of 20.69, a level not seen since November 25, SEEbiz reports. It last traded above 20.
In a post on Truth Social on Saturday, Trump announced that eight U.S. NATO members would face rising tariffs “until an agreement is reached to buy Greenland outright.” The tariffs will start at 10% on February 1 and rise to 25% on June 1, Trump said.
Trump then threatened to impose 200% tariffs on French wines and champagne amid reports that the country’s president, Emmanuel Macron, was unwilling to join his so-called Peace Committee. Trump also criticized the United Kingdom, calling the British government’s plan to hand sovereignty over the Chagos Islands – one of which is the site of a British-US military base – to Mauritius an “act of great stupidity”. He said the move was “one more in a very long line of national security reasons why Greenland must be taken”.
