U.S. stock futures are signalling a sharply lower start to Tuesday’s session, pointing to renewed selling pressure as markets reopen after the long holiday weekend.
Investor nerves have been rattled by fresh concerns over a potential escalation in trade tensions between the United States and Europe, stemming from President Donald Trump’s renewed push to take control of Greenland. Trump has warned that countries opposing the move could face new tariffs, arguing that ownership of the Danish territory is essential to U.S. national security.
In a post on Truth Social, Trump outlined plans to impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland starting February 1. He added that the duties would increase to 25% from June 1 and remain in force until an agreement is reached allowing the U.S. to purchase Greenland.
“Investors will be hoping for some sort of de-escalation deal on Greenland which removes the risk of a break-up or at least serious rupture in the Nato alliance,” said AJ Bell investment director Russ Mould. “If the crisis deepens it is unlikely to spell good news for global equities.”
He added, “Nasdaq looks set to chalk up the biggest declines amid concern about possible retaliatory action from Europe against America’s big tech contingent.”
U.S. equities ended last week on a soft note. Stocks initially moved higher early on Friday but quickly lost momentum, with trading remaining choppy and directionless for most of the session. The major indices hovered around flat levels before closing modestly lower.
The Dow Jones Industrial Average slipped 83.11 points, or 0.2%, to 49,359.33. The Nasdaq Composite fell 14.63 points, or 0.1%, to 23,515.39, while the S&P 500 edged down 4.46 points, or 0.1%, to 6,940.01.
For the week as a whole, the Nasdaq declined 0.7%, while the S&P 500 and the Dow posted losses of 0.4% and 0.3%, respectively.
Market volatility was also influenced by comments from Trump that cast doubt on whether National Economic Council Director Kevin Hassett remains his preferred candidate to succeed Jerome Powell as Federal Reserve chair.
“I see Kevin’s in the audience, and I just want to thank you. You were fantastic on television today,” Trump said during at appearance at the White House. “I actually want to keep you where you are, if you want to know the truth.”
Hassett had been widely viewed as the frontrunner to replace Powell, whose term ends in May, but prediction markets now suggest former Fed Governor Kevin Warsh has moved into the lead following Trump’s remarks.
The uncertainty around the Fed leadership transition has added another layer of caution for investors already grappling with rising geopolitical risks. Traders remain wary as tensions surrounding Greenland persist, alongside ongoing concerns tied to Venezuela, political unrest in Iran and the war between Russia and Ukraine.
On the economic front, data from the Federal Reserve showed U.S. industrial production rose more than expected in December. Output increased 0.4%, matching an upwardly revised gain in November, while economists had forecast a modest 0.1% rise.
Most sectors ended Friday with only small moves, contributing to the muted market close. Commercial real estate stocks were a notable exception, with the Dow Jones U.S. Real Estate Index rising 1.2%.
Semiconductor stocks also extended their rally from Thursday, lifting the Philadelphia Semiconductor Index by 1.2% to a new record closing high. In contrast, steel stocks retreated, with the NYSE Arca Steel Index falling 1.2% after posting its strongest close in more than 17 years the previous session.
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