Stock market today: Dow futures tumble 400 points on Trump’s tariffs over Greenland, Nobel prize

Futures tied to the Dow Jones Industrial Average fell 401 points, or 0.81%. S&P 500 futures fell 0.91%, and Nasdaq futures fell 1.13%.

Markets in the United States were closed for the Martin Luther King Jr. Day holiday. Earlier, the dollar fell amid doubts about the safe haven status of US assets, while stocks in Europe and Asia fell largely.

On Saturday, Trump said Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland would be hit with 10% tariffs starting February 1, rising to 25% on June 1, until “an agreement is reached to fully and fully purchase Greenland.”

The announcement came after those countries sent troops to Greenland last week, ostensibly for training purposes, at Denmark’s request. But late Sunday, a letter appeared from Trump to European officials, linking his insistence on controlling Greenland to his failure to win the Nobel Peace Prize.

The geopolitical impact of Trump’s new tariffs against Europe could jeopardize the transatlantic alliance and threaten Ukraine’s defense against Russia.

But Wall Street analysts were more optimistic about the near-term risks to financial markets, seeing Trump’s move as a negotiating tactic aimed at extracting concessions.

Michael Brown, chief research strategist at Pepperstone, described the maneuver as “escalation to de-escalation” and noted that the timing of the tariff announcement ahead of his appearance at the World Economic Forum in Davos this week was likely not a coincidence.

“I will leave others to question the merits of this approach, and the potential long-term geopolitical ramifications of it, but for markets, such a scenario would likely mean some near-term volatility as headline noise becomes deafening, before relief picks up just in time when another ‘taco’ moment comes,” he said, referring to the “Trump always evades” trade.

Likewise, Jonas Goltermann, deputy chief markets economist at Capital Economics, said “calm will prevail” and downplayed the chances that markets were headed toward a repeat of last year’s tariff chaos.

In a note on Monday, he said investors have learned to be skeptical about all of Trump’s threats, adding that the US economy remains healthy and markets maintain key risk buffers.

“Given their deep economic and financial ties, both the United States and Europe have the ability to impose great pain on each other, but at great cost to themselves,” Golterman added. “As such, the most likely outcome, in our view, is for both sides to recognize that a major escalation would be a losing proposition, and that compromise ultimately prevails. This would be in keeping with the pattern of most previous Trump-led diplomatic dramas.”