Futures on the Dow Jones are down over 320 points, those on the S&P 500 are down 52 points, while the Nasdaq futures are down close to 250 points.
Cash markets will not be trading on Wall Street today on account of a public holiday.
Donald Trump, over the weekend, announced a 10% tariff on European countries that have supported Greenland amidst his plans to acquire the Arctic island nation which is currently a self-governed territory under Denmark. The tariffs, which will take effect from February 1, will go up to 25% on June 1, 2026, in case a deal is not reached till then.
European Union lawmakers are also poised to halt approval of the trade deal with the US that was struck last year, setting a 15% US tariff for most EU goods.
“In the near term, any surprise escalation via tariffs on Europe could trigger a classic risk-off episode, especially after a strong start to the year supported by constructive sentiment,” said Florian Ielpo, head of macro research at Lombard Odier Asset Management. “In that scenario, government bonds could benefit, quality assets would likely outperform, and gold could catch a bid,” he added.
Trump's tariff tantrum also puts the spotlight on the rally seen in European equities. In US Dollar terms, the Stoxx Europe 600 has climbed 36% since the start of 2025, which is double the gains that S&P 500 has seen over the same period. The index trades at 16 times forward earnings, above its 15-year historical average and narrowing its discount to the US counterpart to nearly 30%.
With equities being in risk-off mode, prices of both Gold and Silver are at record high levels, negating the fall seen last week.
