U.S. stock index futures are indicating a steep drop at the open on Tuesday, suggesting equities could face renewed selling pressure as markets reopen after the long holiday weekend.
Investor sentiment has been unsettled by revived worries over a potential trade conflict between the United States and Europe, linked to President Donald Trump’s push to take control of Greenland. Trump has warned that new tariffs could be imposed on several European countries if they resist his efforts to acquire the Danish territory, which he has described as strategically vital for U.S. national security.
In a post on Truth Social, Trump said he plans to introduce a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland starting February 1. He added that these duties would rise to 25% from June 1 and stay in place until an agreement is reached allowing the U.S. to purchase Greenland.
“Investors will be hoping for some sort of de-escalation deal on Greenland which removes the risk of a break-up or at least serious rupture in the Nato alliance,” said AJ Bell investment director Russ Mould. “If the crisis deepens it is unlikely to spell good news for global equities.”
He added, “Nasdaq looks set to chalk up the biggest declines amid concern about possible retaliatory action from Europe against America’s big tech contingent.”
U.S. stocks had initially moved higher early on Friday, but those gains quickly faded, with markets struggling for direction through the rest of the session. The main indices spent much of the day oscillating around the flat line before finishing modestly lower.
The Dow Jones Industrial Average fell 83.11 points, or 0.2%, to 49,359.33. The Nasdaq Composite slipped 14.63 points, or 0.1%, to 23,515.39, while the S&P 500 edged down 4.46 points, or 0.1%, to 6,940.01.
Over the full week, the Nasdaq declined 0.7%, while the S&P 500 and the Dow dropped 0.4% and 0.3%, respectively.
The choppy tone on Wall Street followed comments from President Donald Trump suggesting that National Economic Council Director Kevin Hassett may not ultimately be his preferred choice to succeed Jerome Powell as Federal Reserve chair.
“I see Kevin’s in the audience, and I just want to thank you. You were fantastic on television today,” Trump said during at appearance at the White House. “I actually want to keep you where you are, if you want to know the truth.”
Hassett had previously been viewed as the frontrunner to replace Powell, whose term ends in May. However, prediction markets now indicate that former Fed Governor Kevin Warsh has moved into the lead following Trump’s remarks.
These developments have added uncertainty around Trump’s eventual pick for Fed chair and the future path of U.S. interest rates. Traders have also been hesitant to take large positions amid rising geopolitical risks more broadly.
Trump’s repeated threats to seize control of Greenland remain in focus, alongside concerns about possible tariffs on countries that oppose his plans. Investors are also monitoring developments in Venezuela, political unrest in Iran and the ongoing Russia-Ukraine war.
On the U.S. data front, the Federal Reserve reported that industrial production rose more strongly than expected in December. Output increased by 0.4%, matching an upwardly revised gain from November, while economists had forecast a more modest 0.1% rise.
Most market sectors ended Friday with only limited movement, contributing to the subdued close for the broader indices. One notable exception was commercial real estate, with the Dow Jones U.S. Real Estate Index gaining 1.2%.
Semiconductor stocks also extended their recent rally, pushing the Philadelphia Semiconductor Index up 1.2% to a record closing high. In contrast, steel stocks retreated, with the NYSE Arca Steel Index sliding 1.2% after having ended Thursday at its strongest close in more than 17 years.