S&P 500, Nasdaq futures drop to one-month lows on Trump’s new tariff threat
S&P 500 and Nasdaq futures plummeted to one-month lows on Tuesday, as U.S. traders returned from the long weekend to face a global market sell-off triggered by President Donald Trump's renewed tariff threats against Europe over the control of Greenland.
The announcement sparked significant risk aversion globally, with gold prices hitting record highs, stock markets worldwide sliding, and U.S. Treasuries experiencing a sell-off, News.Az reports, citing Reuters.
U.S. markets were closed on Monday in observance of Martin Luther King Jr. Day, and the renewed trade tensions overshadowed investor sentiment as trading resumed.
Trump said on Saturday additional 10% import tariffs would take effect on February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by the U.S.
The tariffs would increase to 25% on June 1 and would continue until a deal was reached for the U.S. to purchase Greenland, Trump wrote in a post on Truth Social. Leaders of Greenland, an autonomous territory of Denmark, and Denmark have insisted the island is not for sale.
The CBOE Volatility index (.VIX), also known as Wall Street's fear gauge, touched a two-month high at 20.61 points.
At 5:32 a.m. ET, S&P 500 e-minis were down 112 points, or 1.61%. Nasdaq 100 E-minis fell 505.25 points, or 1.97% and Dow e-minis dropped 728 points, or 1.47%.
In a busy week for data releases including third-quarter U.S. GDP reading and January PMIs, traders will also focus on quarterly earnings reports, speeches from world leaders at Davos and a potential Supreme Court ruling on Trump's tariffs.
Among stocks, RAPT Therapeutics (RAPT.O) soared 63.5% in premarket trading after Britain's GSK (GSK.L) agreed to buy the U.S. firm for $2.2 billion, adding global rights to the experimental food allergy drug ozureprubart to its respiratory and immunology portfolio.
U.S.-listed shares of precious metal miners such as Hecla Mining (HL.N) and Endeavour Silver jumped 6.3% and 4.8%, respectively, as gold prices soared past $4,700 per ounce for the first time and silver hovered below record highs.
Netflix which is expected to report results after markets close on Tuesday, inched up 0.6%.
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