Wall Street Loses Ground as Trump Threatens European Tariffs, Global Markets Fall

Wall Street tumbled sharply Tuesday after President Donald Trump threatened new tariffs on eight European countries, sending shockwaves through global markets.

The announcement, tied to Trump's controversial push to assert American influence over Greenland, triggered widespread selling across nearly all sectors.

The S&P 500 fell 143.15 points, or 2.1%, to 6,796.86, marking its steepest drop since October.

The Dow Jones Industrial Average dropped 870.74 points, or 1.8%, to 48,488.59, while the Nasdaq composite fell 561.07 points, or 2.4%, to 22,954.32, AP News reported.

Technology stocks were hit particularly hard, with Nvidia tumbling 4.4% and Apple slipping 3.5%. Retailers, banks, and industrial companies also saw sharp declines. Lowe's lost 3.3%, JPMorgan Chase fell 3.1%, and Caterpillar slid 2.5%.

The market turmoil spilled over to Europe and Asia, where stocks declined and Japanese long-term bond yields reached record levels amid concerns over government fiscal policy.

Investors flocked to traditional safe-haven assets, pushing gold prices up 3.7% and silver prices 6.9%. Even bitcoin, which briefly surged past $96,000 last week, retreated to around $89,700.

Trump announced Saturday that he would impose a 10% import tax starting in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland.

Combined, these nations export more to the US than either Mexico or China. The move has provoked outrage in Europe, with leaders exploring retaliatory measures, including the first use of the EU's anti-coercion instrument.

Wall Street Eyes Inflation Report

Trump linked his aggressive stance on Greenland to last year's Nobel Peace Prize decision, telling Norway's prime minister in a text message that he no longer felt "an obligation to think purely of Peace."

Analysts say the political and trade tensions are overshadowing the World Economic Forum in Davos.

According to HuffPost, Wedbush Securities analyst Dan Ives said, "The bark will be worse than the bite on this issue... tensions ultimately calm down between Trump and EU leaders."

The potential tariffs add to inflation concerns, though increases have so far been modest.

The Federal Reserve, which cut interest rates three times in late 2025, faces the challenge of balancing economic growth against rising prices.

Investors will watch Thursday's release of the personal consumption expenditures price index, the Fed's preferred inflation gauge, ahead of next week's policy meeting.

Meanwhile, corporate earnings continue to reflect uncertainty. Industrial giant 3M dropped 7% after reporting mixed results, while other companies, including Johnson & Johnson, Halliburton, and Intel, are scheduled to release quarterly figures this week.

Originally published on vcpost.com