U.S. equity futures are pointing to a slightly weaker start on Wednesday, suggesting stocks could extend their recent slide after a sharp sell-off in the previous session.
Market sentiment remains under pressure as investors weigh the risk of a deepening trade dispute between the United States and Europe, sparked by President Donald Trump’s push to bring Greenland under U.S. control. These geopolitical tensions continue to hang over Wall Street.
Attention is also focused on Trump’s remarks at the World Economic Forum in Davos, Switzerland, where he is expected to outline his stance on trade and international relations.
After ending last Friday’s volatile session modestly lower, U.S. stocks came under heavy pressure on Tuesday. All three major benchmarks posted steep declines, compounding losses from the prior week.
Selling accelerated into the close, leaving the indices near their intraday lows. The Dow Jones Industrial Average dropped 870.74 points, or 1.8%, to 48,488.59. The Nasdaq Composite slid 561.07 points, or 2.4%, to 22,954.32, while the S&P 500 fell 143.15 points, or 2.1%, to 6,796.86.
The downturn was fueled by renewed fears of a transatlantic trade conflict tied to Trump’s efforts to acquire Greenland.
The president has warned he would impose fresh tariffs on several European countries if they oppose a U.S. bid to buy the Danish territory, which he has described as strategically vital for national security.
Posting on Truth Social, Trump said he plans to introduce 10% tariffs on imports from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland starting February 1, with the rate rising to 25% from June 1 unless a deal is reached.
“Comments from the US president that there is ‘no going back’ on Greenland have sent US indices down sharply today as the world tries to figure out whether this is another example of strategic game-playing masked by bluster, or if he is deadly serious about a land grab from a NATO ally,” said AJ Bell head of financial analysis Danni Hewson.
She added, “There is no certainty that the temperature can be turned down this time, and the continued surge in the price of gold suggests many are hoping for the best but looking to further pad out portfolios with safe haven assets.”
Sector-wise, housing-related stocks were among the hardest hit, dragging the Philadelphia Housing Sector Index down 2.5%.
Airlines also faced heavy selling pressure, with the NYSE Arca Airline Index falling 2.4%.
Weakness spread across networking, brokerage and retail shares, while gold mining stocks surged alongside rising bullion prices.
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