Stock markets fell sharply on both sides of the Atlantic on Tuesday, with Wall Street experiencing its worst day since October, as investor fears mounted over Donald Trump's tariff threats against eight European countries linked to his push for US control of Greenland.
The S&P 500 closed down 2.1%, the Dow Jones fell 1.8%, and the tech-heavy Nasdaq dropped 2.4%. Major tech stocks were hit hard, with Amazon down 2.9% and Tesla and Nvidia both falling more than 3%, wiping billions off their market values.
In Europe, the UK's FTSE 100 fell 0.7%, France's CAC dropped 0.6%, Germany's DAX declined 1%, and Italy's FTSE MIB lost 1.1%. The sell-off followed Trump's weekend threat to impose tariffs on imports from Germany, France, Denmark, the UK, Sweden, the Netherlands, Norway, and Finland, starting at 10% on 1 February and rising to 25% on 1 June, unless a deal is reached for the purchase of Greenland.
Speaking at the World Economic Forum in Davos, US Commerce Secretary Howard Lutnick downplayed the risk of a trade war, calling the situation a 'kerfuffle' and predicting diplomacy. However, UK Chancellor Rachel Reeves urged de-escalation, stating that 'the future of Greenland is for the people of Greenland.' US Treasury Secretary Scott Bessent also appealed for calm, but analysts said his comments failed to reassure investors.
Gold and silver hit record highs as investors sought safe havens, with gold surpassing $4,700 an ounce for the first time and silver reaching $95.52 an ounce. Trump also threatened 200% tariffs on French wine after reports that President Macron would not join his proposed Gaza peace board.
