Wall Street is experiencing its worst day since October as President Trump doubles down on his threat to seize Greenland.
Stock markets and the US dollar have fallen following US President Donald Trump’s latest threat to take control of Greenland, spooking investors around the world.
Trump’s threat to impose hefty tariffs on Denmark and seven other European countries unless a deal is reached to sell the territory appears to have spooked markets, as President Trump claims Greenland is critical to U.S. national security because of China and Russia’s strategic ambitions in the Arctic.
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Wall Street’s benchmark S&P 500 index fell nearly 2.1% on Tuesday as President Trump stepped up his threat to seize an Arctic island.
The Nasdaq Composite Stock Index, which focuses on high-tech stocks, fell nearly 2.4%, and the Dow Jones Industrial Average fell nearly 1.8%.
The decline marked Wall Street’s worst day since October.
The US dollar, which has traditionally been a safe haven for investors during stock market fluctuations, fell 0.8% against a basket of major currencies.
European stocks also fell on Tuesday, with London’s FTSE 100 index down about 0.7% and Frankfurt’s DAX index closing more than 1% lower.
Gold, which often attracts buyers when uncertainty increases, rose nearly 2% to a record high of more than $4,700 an ounce.
Asia’s stock market decline continued into Wednesday, with Japan’s benchmark Nikkei stock average and South Korea’s KOSPI falling more than 1% in early trading before regaining most of their losses in late morning trading.
President Trump’s insistence that Greenland be placed under US control has sent relations between the US and Europe to their lowest ebb in decades, raising concerns about the survival of the NATO military alliance and free transatlantic trade.
President Trump has also refused to rule out the use of military force to achieve his goals, even though the United States and Denmark are both NATO members.
Denmark has repeatedly said Greenland is not for sale and says any move to seize the island by force would mean the end of the 32-nation transatlantic alliance, which operates on the principle that an attack on a NATO member should be considered an attack on all NATO members.
The European Union will convene an emergency meeting on Thursday to discuss responses to President Trump’s threats, including the possibility of triggering an anti-coercion mechanism that would give the trade bloc the power to impose wide-ranging restrictions on U.S. tech companies operating in the common market.
“We’ll see,” Trump said at a White House briefing on Tuesday when asked how far he intends to go to acquire Greenland.
President Trump, who is scheduled to meet with leaders of NATO allies at the annual World Economic Forum (WEF) in Davos on Wednesday, also expressed confidence that an agreement was reached on Greenland and that “things will go pretty well.”
European Commission President Ursula von der Leyen, speaking at Davos on Tuesday, said European leaders would work with the United States to strengthen security in the Arctic, but the European Union could not compromise national sovereignty.
“We consider the American people not just allies, but friends,” von der Leyen said.
“And sending us into a dangerous downward spiral will only help the very adversaries we are both intent on keeping from the strategic landscape,” she said.
“Our response will therefore be unflinching, united and proportionate.”
