Wall Street set to fall as U.S.-Greenland standoff knocks sentiment
NEW YORK (January 20) Wall Street's main indexes were set to open sharply lower on Tuesday, as investors were spooked by renewed tariff threats from President Donald Trump against Europe over control of Greenland.
U.S. traders were returning from a market holiday on Monday to a bout of global risk aversion that sent gold prices to record highs, stocks across the world sliding and U.S. Treasuries reeling under pressure.
Trump said on Saturday additional 10% import tariffs would take effect on February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by the U.S.
The tariffs would increase to 25% on June 1 and would continue until a deal was reached for the U.S. to purchase Greenland, Trump wrote in a post on Truth Social. Leaders of Greenland, an autonomous territory of Denmark, and Denmark have insisted the island is not for sale.
"We're getting the weakness because the headlines are going to drive angst and concern about what the future holds," said David Lundgren, chief market strategist at Little Harbor Advisors.
"We're seeing a broadening away from the Mag 7 into small and mid-cap companies. And possibly, a broadening away from the U.S. to other markets overseas that have been underperforming."
On Tuesday, Trump marks one year back in office - a volatile period for markets that saw the S&P 500 plunge to near bear market territory following "Liberation Day" tariffs in April before rebounding to record highs on strong earnings and a resilient economy.
Critical Metals (CRML.O), which has a strategic presence in Greenland, jumped 8.3% in premarket trade.
The CBOE Volatility index (.VIX), also known as Wall Street's fear gauge, touched a two-month high at 19.69 points.
By 8:26 a.m. ET, S&P 500 e-minis were down 95.5 points, or 1.37%. Nasdaq 100 e-minis fell 423.25 points, or 1.65% and Dow e-minis dropped 632 points, or 1.28%.
JAM-PACKED WEEK OF DATA AND EARNINGS
Investors headed into a jam-packed week, with a slate of market-moving data such as the third-quarter U.S. GDP update, January PMI readings and the Personal Consumption Expenditures report, which is the Federal Reserve's preferred inflation gauge.
Earnings season is also kicking into a higher gear. Several industry bellwethers, including Intel (INTC.O), Netflix and (NFLX.O), are set to report their quarterly earnings this week.
Netflix, due to report after the bell on Tuesday, gained 1.3%, while industrial giant 3M (MMM.N), fell 4.8% after it forecast annual adjusted profit slightly below Wall Street estimates.
Of the 33 S&P 500 companies that had reported as of Friday, 84.8% topped analysts' expectations, according to data compiled by LSEG.
Markets are also watching the potential for a Supreme Court decision tied to Trump's tariffs, alongside speeches by global leaders at the World Economic Forum in Davos, Switzerland.
Trump may reach a decision on the next chairman of the U.S. Federal Reserve as early as next week, U.S. Treasury Secretary Scott Bessent said a CNBC interview - keeping markets on edge after the Trump administration last week threatened to indict Chair Jerome Powell.
Among other stocks, RAPT Therapeutics (RAPT.O), soared 63.7% after Britain's GSK (GSK.L), agreed to buy the U.S. firm for $2.2 billion, adding global rights to the experimental food allergy drug ozureprubart to its respiratory and immunology portfolio.
U.S.-listed shares of precious metal miners such as Hecla Mining (HL.N), and Endeavour Silver jumped 7.2% and 4.3%, respectively, as gold prices soared past $4,700 per ounce for the first time and silver hovered below record highs.
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