US stock futures tumbled on Tuesday, signaling a rocky return to trading as President Trump escalated trade tensions with Europe over Greenland, reviving tariff fears just as earnings season picks up pace.
Dow Jones Industrial Average futures (YM=F) pulled back 1.3%, pointing to a drop of over 600 points when markets reopen from Monday’s holiday shutdown. S&P 500 futures (ES=F) fell 1.4%, while Nasdaq 100 futures (NQ=F) sank 1.7% on the heels of a losing week for Wall Street stocks.
.Markets are grappling with Trump’s weekend threat that the US will impose sweeping tariffs on imports from eight NATO countries unless they back its “complete and total purchase of Greenland.” In response, the EU has discussed up to $108 billion in retaliatory tariffs. It could also deploy an “anti-coercion instrument” that could fuel sales of US assets with a potential fallout of some $8 trillion.
In a Truth Social post on Saturday, Trump said US tariffs against the EU would begin at 10% on Feb. 1 and climb to 25% by June 1. European officials quickly condemned the threat as “unacceptable.” Adding to the intrigue this week, Trump will speak at the World Economic Forum in Davos, Switzerland, on Wednesday.
Against that backdrop, the benchmark 10-year Treasury yield (^TNX) rose to just below 4.3% as the US joined a global slump in bonds. The retreat was stoked by a meltdown in Japanese bonds, which saw yields surge to records amid worries about the tax cuts promised by Japan’s prime minister in an election pitch.
Looking ahead, the Supreme Court may rule as soon as this week on whether Trump’s use of the International Emergency Economic Powers Act to impose tariffs is constitutional. Treasury Secretary Scott Bessent said Sunday he believes it is “very unlikely” the court would overturn what he called the president’s signature economic policy.
Investors are also bracing for a busy earnings slate, with results due from Netflix (NFLX), Intel (INTC), and Johnson & Johnson (JNJ), among others. Corporate guidance will be closely watched, particularly as analysts expect the S&P 500 (^GSPC) to deliver earnings growth of roughly 12% to 15% this year, with room for an equal downside if “Sell America” sentiment continues to linger.
LIVE 3 updates
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Treasurys join global bond slide as tariff angst grips markets
Treasurys fell early on Tuesday as President Trump’s tariff threats over Greenland dimmed the allure of US assets and ignited concerns the duties on European imports would add to inflationary pressures.
Bloomberg reports:
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Gold holds just below record price as Greenland insecurity buoys haven demand
Bloomberg reports:
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Oil prices hold as EU-US trade concerns build in response to Greenland push
Bloomberg reports:
