Wall Street has its worst day since October as Trump doubles down on threats to take Greenland.
The shock of US President Donald Trump Take over Greenland Investors around the world have been jolted, with stock markets and the US dollar falling due to his latest threats to the sector.
Trump, who claims Greenland is vital to US security because of China and Russia’s strategic ambitions in the Arctic, has threatened Denmark and seven other European countries with steep tariffs if they do not agree to sell the autonomous Danish territory.
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The warning seems to have rattled the markets.
Wall Street’s benchmark S&P 500 fell about 2.1 percent on Tuesday as Trump doubled down on threats to seize Arctic islands.
The tech-focused Nasdaq Composite fell nearly 2.4 percent, while the Dow Jones Industrial Average fell nearly 1.8 percent.
The decline marked Wall Street’s worst day since October.
The US dollar, traditionally a safe haven for investors during periods of stock market volatility, fell 0.8 percent against a basket of major currencies.
European shares also fell on Tuesday, with the FTSE 100 in London down about 0.7 percent and the DAX in Frankfurt down more than 1 percent.
Gold, which often attracts buyers when uncertainty rises, rose nearly 2 percent, hitting a record high of $4,700 an ounce.
Stocks continued to sell off in Asia on Wednesday, with Japan’s benchmark Nikkei 225 and South Korea’s KOSPI falling more than 1 percent in early trade and losing much of the morning.
Trump’s insistence that Greenland must be brought under US control has plunged US-European relations to their lowest level in decades, raising fears about the existence of the NATO military alliance and the free flow of transatlantic trade.
Despite the fact that both the US and Denmark are members of NATO, Trump has refused to use military force to achieve his goals.
Denmark has repeatedly said that Greenland is not for sale and that any move to force the island would end the 32-member transatlantic alliance, which operates on the principle that an attack against any NATO member is an attack against all.
The European Union is set to convene an emergency meeting on Thursday to discuss responses to Trump’s threats, including possible activation by Trump. Anti-coercion mechanism That gives the trade group the power to impose sweeping sanctions on US tech companies operating in the common market.
Asked how far he would go to acquire Greenland during a briefing at the White House on Tuesday, Trump said, “you will know.”
Trump, who will meet leaders of NATO allies at the annual World Economic Forum (WEF) gathering in Davos on Wednesday, expressed confidence that a deal on Greenland would be reached and “things will go well”.
Addressing the Davos Forum on Tuesday, European Commission President Ursula von der Leyen said European leaders would work with the US to strengthen Arctic security, but the bloc could not compromise national sovereignty.
“We consider the people of the United States not just our friends, but our allies,” von der Leyen said.
“And plunging us into a dangerous downward spiral will only help the very adversaries we are both so committed to keeping out of the strategic landscape. So our response will be unwavering, united and proportionate.”