Futures tied to the main U.S. equity indices pointed lower as investors weighed the risk that Washington could impose new tariffs on a range of European countries over Greenland. President Donald Trump said he plans to hold meetings on Greenland during a trip to an annual economic forum in Switzerland, while European leaders consider possible responses to his demand for U.S. ownership of the territory. Back in the United States, attention is also on a potential Supreme Court ruling on the legality of Trump’s tariffs. Elsewhere, Netflix (NASDAQ:NFLX) is set to report its latest results.
Futures dip
U.S. stock futures fell on Tuesday, pointing to a weak start to a shortened trading week dominated by tensions surrounding Greenland.
By 03:07 ET, Dow futures were down 677 points, or 1.4%, S&P 500 futures had slipped 102 points, or 1.5%, and Nasdaq 100 futures had dropped 449 points, or 1.8%.
Wall Street’s main indices were closed on Monday for Martin Luther King Jr. Day. Even so, sentiment remained under pressure from Trump’s threat to introduce fresh tariffs on several European countries unless the U.S. is allowed to take ownership of Greenland. Global equity markets have retreated at the start of the week, reflecting unease over the potential impact of tariffs that Trump said would begin at 10% and could rise to 25% in June if his demands over the semi-autonomous Danish territory are not met.
Economists at Capital Economics estimated that, if implemented and maintained for an extended period, the tariffs could shave “something between” 0.2% and 0.5% off euro zone GDP, with Germany among the hardest hit.
“In practice though, we doubt that they will be implemented as advertised. We also think the [European Union] will be cautious in any retaliation in an effort to avoid further escalation,” the analysts said.
Trump says he will hold Greenland meeting at Davos
Trump indicated he would hold discussions on Greenland during his visit this week to the annual meeting of the World Economic Forum in Davos, Switzerland.
On social media, Trump said he had held a “very good” call with NATO chief Mark Rutte, who has worked to keep the U.S. president aligned with the long-standing alliance.
Trump, who is due to address the gathering of business and political leaders on Wednesday, added that he would meet with “various parties” during the trip, without specifying who. He also reiterated his position on Greenland, writing: “As I expressed to everyone, very plainly, Greenland is imperative for National and World Security. There can be no going back — On that, everyone agrees!”
European governments are reported to be debating how to respond to the Greenland dispute, including the possibility of imposing steep tariffs on €93 billion worth of U.S. goods. France has also urged the European Union to consider using an anti-coercion instrument that could extend to restrictions on investment or banking activity.
This option has been described as a potential “bazooka” for the EU, raising the prospect of a deep rift between Brussels and Washington after the two sides reached a trade agreement last summer. The episode has also reignited questions over the future of NATO.
Potential Supreme Court tariff ruling ahead
In the background looms a long-awaited Supreme Court decision on the legality of Trump’s broad import tariffs on multiple countries.
Trump has relied on a 1977 statute, the International Emergency Economic Powers Act (IEEPA), to justify the measures, arguing it grants the president wide authority over international economic transactions during a national emergency. However, judges signalled significant scepticism during hearings late last year, leading markets to expect the court could rule against the administration.
Media reports suggest a decision could be issued as early as Tuesday. Even so, U.S. Trade Representative Jamieson Greer told the New York Times that officials are preparing alternative duties that would “start the next day” should the court strike down the current tariffs.
Gold hits fresh record
Gold prices pushed to a new all-time high on Tuesday, as uncertainty over U.S. demands on Greenland kept investors cautious and boosted demand for safe havens.
Gold and silver both touched record levels earlier in the week following Trump’s latest tariff threat. While silver saw some profit-taking on Tuesday, gold remained well supported. A weaker U.S. dollar also helped underpin prices.
Spot gold rose 1.0% to $4,724.83 an ounce, while gold futures jumped 3.0% to $4,730.50 per ounce by 03:49 ET.
Netflix to report
On the corporate calendar, Netflix is due to publish its latest quarterly results after the close of U.S. trading on Tuesday.
Bloomberg consensus forecasts point to earnings per share of $0.55 on revenue of $11.96 billion. However, investors are likely to focus less on the headline numbers and more on any commentary around Netflix’s interest in acquiring Warner Bros. Discovery (NASDAQ:WBD), a target that has also attracted a rival bid from Paramount Skydance.
The contest for Warner Bros. Discovery is expected to run for months and could face regulatory scrutiny in both the U.S. and Europe. Netflix has identified the group — whose assets include HBO Max and franchises such as “Harry Potter” and “Friends” — as a potential growth lever. Despite success with series like “Stranger Things” and an expansion into live sports, Netflix remains under pressure to demonstrate returns from heavy investment in advertising and video games.