Wall Street suffered a sharp sell-off at the opening bell as traders returned to their desks for the first time since Donald Trump escalated tariff threats linked to Greenland.
The Dow Jones Industrial Average dropped 653.07 points, or 1.3pc, at the open to 48,706.26. The S&P 500 slid 94.67 points, or 1.4pc, to 6,843.59, while the Nasdaq Composite shed 385.24 points, or 1.6pc, to 23,130.15.
US markets had been closed on Monday for the Martin Luther King Jr Day public holiday, amplifying the initial reaction when trading resumed.
Volatility also climbed, with the CBOE Volatility Index, often dubbed Wall Street’s fear gauge, touching a two-month high after Mr Trump said he was “100pc” committed to imposing tariffs on eight European countries unless a deal over Greenland is reached.
Kate Leaman, an analyst at AvaTrade, said: “We’re not in panic territory, but it’s worth watching defence companies and gold miners.
“Tariffs might nudge everyday prices up slightly, keeping inflation in focus. Trade wars create ups and downs, but history favours the prepared.”
Investors are also bracing for potential legal uncertainty, with the US Supreme Court due to issue rulings on Tuesday that could include opinions in a key case examining the legality of Mr Trump’s tariffs.
Image: The US president posted an AI-generated image of him planting a US flag in Greenland
