U.S. President Donald Trump attends a press conference at the White House on January 20, 2026, in Washington, DC, marking the end of his second term in office.
Nathan Howard | Reuters
Markets on Tuesday showed classic signs of a “Sell America” trade as investors balked at rising risks related to Washington’s foreign policy.
Greenland Prime Minister Jens Frederik Nielsen emphasized this point late on Tuesday, saying that the “other side” – seemingly alluding to the US – had not ruled out using military force to take control of the island.
Major U.S. indexes fell on Tuesday for their worst day since October, S&P500 and Nasdaq Composite It will enter negative territory in 2026. Volatility increases; VIX indexWall Street’s “Fear Gauge” soared to an all-time high of 20.99. Meanwhile, bond yields soared us dollar index Fall down gold Prices set new records.
The moves reflect concerns raised by Bridgewater Associates founder Ray Dalio, who warned that rising tensions could spill over into capital markets.
Dalio said on Tuesday that U.S. President Donald Trump’s aggressive moves to annex Greenland could cause foreign governments and investors to reconsider their appetite for U.S. assets.
“Behind every trade deficit and trade war, there are capital wars and capital wars,” Dalio told CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switzerland.
One early signal came from Denmark. Pension fund Academia Carpension announced it would sell about $100 million in U.S. bonds.
The fund’s investment director, Anders Schelde, said the decision was due to concerns about “the poor state of (US) government finances” and “is not directly related to the ongoing rift between (US) and Europe”, but added that recent tensions between the US and Europe “do not make it difficult to make a decision”.
Meanwhile, U.S. officials took a defiant stance. “America is back. This is what American leadership looks like,” Treasury Secretary Scott Bessent told CNBC in Davos. Bessent made the comments before markets closed on Tuesday.
The international community’s reaction to President Trump’s move has not been well received. Greenlanders are “embarrassed” by the US president, the Arctic island’s commerce minister told CNBC on Tuesday, while French President Emmanuel Macron denounced “bullying” and “atrocities”, without providing details, while calling for the removal of U.S. tariffs on Europe.
But amid the turmoil of recent days, President Trump shows no signs of backing down.
“As you know, we’re leaving Davos tonight, and we have a number of meetings scheduled in Greenland,” Trump said on Tuesday. “I think things are going to go pretty well.”
Trump may be right. The more immediate question confounding the market is: For whom will it work?
What you need to know today
Be prepared for “everything”: Prime Minister of Greenland. The island’s Prime Minister Jens Frederik Nielsen said on Tuesday that the United States was “unlikely to use military force, but it has not yet been ruled out.”
US markets fall due to concerns over Greenland. On Tuesday, the S&P 500 fell 2.06%, the Dow Jones Industrial Average fell 1.76% and the Nasdaq Composite fell 2.39%. Asia-Pacific markets were mostly lower on Wednesday, but spot gold prices rose further to a new record.
UK inflation was higher than expected in December. The consumer price index rose to 3.4% for the month, higher than the 3.3% expected by economists polled by Reuters. Core inflation has remained unchanged since November. The numbers raise questions about whether the BOE will go ahead with its expected February rate cut.
Netflix recorded a small profit. Fourth-quarter earnings per share were 56 cents, 1 cent higher than expected, and revenue was $12.05 billion, compared with expectations of $11.97 billion. early Tuesday morning, Netflix fixed that warner bros discovery Offer all cash bid.
(PRO) It is doubtful whether Greenland’s decline will continue. Wall Street analysts said that while President Trump’s “weaponization of tariffs” was surprising, it could ultimately calm tensions.
