U.S. stock index futures are signaling a slightly weaker start to Wednesday’s session, pointing to the possibility of additional declines after the sharp sell-off seen a day earlier.
Investor sentiment remains fragile amid fears of an escalating trade dispute between the United States and Europe, sparked by President Donald Trump’s push to secure control of Greenland. Those concerns are expected to continue weighing on Wall Street.
Markets may also react to comments from Trump at the World Economic Forum in Davos, Switzerland, where the president is currently delivering remarks.
After closing last Friday’s volatile session modestly lower, U.S. stocks came under heavier pressure on Tuesday. All three major benchmarks posted steep losses, extending the downturn from the prior week.
Selling intensified late in the day, leaving the indices near their session lows. The Dow Jones Industrial Average fell 870.74 points, or 1.8%, to 48,488.59. The Nasdaq Composite dropped 561.07 points, or 2.4%, to 22,954.32, while the S&P 500 slid 143.15 points, or 2.1%, to 6,796.86.
The renewed slide reflected growing anxiety over a potential U.S.-Europe trade war tied to Trump’s efforts to acquire Greenland.
The president has warned that he would introduce new tariffs on several European countries if they oppose the U.S. bid to buy the Danish territory, which he has described as critical to national security.
In a post on Truth Social, Trump said he plans to impose a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland starting February 1.
He added that the tariffs would rise to 25% from June 1 and stay in effect until an agreement is reached for the United States to purchase Greenland.
“Comments from the US president that there is ‘no going back’ on Greenland have sent US indices down sharply today as the world tries to figure out whether this is another example of strategic game-playing masked by bluster, or if he is deadly serious about a land grab from a NATO ally,” said AJ Bell head of financial analysis Danni Hewson.
She added, “There is no certainty that the temperature can be turned down this time, and the continued surge in the price of gold suggests many are hoping for the best but looking to further pad out portfolios with safe haven assets.”
Sector performance on Tuesday highlighted the risk-off tone. Housing stocks were among the hardest hit, pulling the Philadelphia Housing Sector Index down 2.5%.
Airline shares also suffered notable losses, with the NYSE Arca Airline Index sliding 2.4%.
Weakness extended to networking, brokerage and retail stocks, while gold-related equities rallied sharply in tandem with rising bullion prices.