Stocks slumped in morning trading on Wall Street Tuesday after President Donald Trump threatened to hit eight NATO members with new tariffs as tensions escalate over his attempts to assert American control over Greenland.
The S&P 500 fell 1.5%, pulling back further from the record it set early last week. It was the first time U.S. markets could react to the escalation from Trump, as they were closed on Monday for Martin Luther King Jr. Day.
The Dow Jones Industrial Average fell 682 points, or 1.5%, as of 10:04 a.m. Eastern. The Nasdaq composite slumped 1.7%.
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The losses were widespread and led by technology stocks, many of which already have more influence over the direction of the market because of outsized values. Retailers, banks and industrial companies also fell sharply.
Nvidia, one of the most valuable companies in the world, plunged 3.2%. Amazon fell 2.7%, JPMorgan Chase fell 1.9%, and Caterpillar lost 1.3%.
The broader energy sector eked out gains as the price of U.S. crude oil rose 1.5%. Exxon Mobil rose 1.5%.
European markets and markets in Asia fell.
Trump said Saturday that he would charge a 10% import tax starting in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland. The annual combined imports from European Union nations are greater than those from the top two biggest individual importers into the U.S., Mexico and China.
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Gold prices surged 3.2% and silver prices soared 7%. Both reached for records. Such assets are often considered safe havens in times of geopolitical turmoil.
Treasury yields were mixed in the bond market. The yield on the 10-year Treasury rose to 4.28% from 4.23% late Friday. The yield on the two-year Treasury fell to 3.59% from 3.60% late Friday.
Trump linked his aggressive stance on Greenland to last year’s decision not to award him the Nobel Peace Prize, telling Norway’s prime minister that he no longer felt “an obligation to think purely of Peace,” in a text message released Monday.
Trump’s message to Jonas Gahr Støre appeared to ratchet up a standoff between Washington and its closest allies over his threats to take over Greenland, a self-governing territory of NATO member Denmark.
Trump's threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion instrument.
