Stocks Sink on Greenland as Japan Stirs Bond Rout: Markets Wrap
(Bloomberg) — Equities extended their selloff as the standoff between the US and Europe over control of Greenland showed no sign of de-escalation, while heavy selling in Japanese debt rippled through global bond markets.
A 1.6% slump in S&P 500 futures from Friday’s close left the benchmark poised to wipe out year-to-date gains. European stocks fell 1.2%, adding to losses after the Stoxx 600’s worst day in two months. Nasdaq 100 contracts sank 1.9%.
US President Donald Trump’s push to take control of Greenland has injected fresh volatility into markets, reviving fears of a trade confrontation between traditional allies with little sign of compromise. Adding to tensions, Trump overnight threatened steep tariffs on champagne after French President Emmanuel Macron ruled out joining a US-led peace initiative.
“The only hope really is that Republican senators and congressmen put a stop to this,” said Laurent Lamagnere, deputy chief executive officer at AlphaValue in Paris. “Investors have taken advantage of these volatility moments to buy the dip but for myself, I am not comfortable. There is no guarantee it will work this time.”
Longer-term Treasury yields spiked after a meltdown in Japanese bonds, sending the 30-year US rate up nine basis points to 4.93%. Investors balked at Prime Minister Sanae Takaichi’s election pitch to cut taxes on food, pushing Japan’s 40-year rate to a fresh high.
What Bloomberg Strategists Say:
“The message to policymakers from the markets is unmistakable: if you plan to spend more without new revenue to match that ambition, be prepared to see yields go up a whole lot.
“And given how unforgiving global bond vigilantes appear to be right now, that message won’t be diluted even if the markets are beset by growth concerns prompted by the prospect of new tariffs over US demands for Greenland.”
— Ven Ram, macro strategist. For full analysis, click here.
Precious metals, meanwhile, were the main beneficiary of Tuesday’s turmoil as investors sought safety. Gold topped $4,700 an ounce for the first time while silver also hit a fresh record. A gauge of the dollar fell 0.3%, while the Swiss franc posted its biggest two-day advance since April.
A series of fresh catalysts could arrive in the coming days, starting with another opportunity on Tuesday for the US Supreme Court to rule on the legality of large parts of Trump’s trade policy. Trump is also due to speak in Davos on Wednesday, with investors watching for any sign of an off-ramp in his dispute over Greenland.
The Supreme Court decision “could change the situation,” said Nicolas Bickel, group head of investment private banking at Edmond de Rothschild. “It is very difficult to define where the floor is, but we know we have high valuations in nearly every market.”
The continuation of earnings season could give investors something to cheer after a strong start. About 88% of the 33 S&P 500 companies that have reported so far have beaten expectations, according to data compiled by Bloomberg Intelligence, helping underpin the market’s three-year bull run.
Netflix Inc. is expected to post a 25% increase in adjusted earnings for the fourth quarter from a year earlier when it reports after the close on Tuesday. Investors will also be watching developments in its fierce battle to take over Warner Bros. Discovery Inc.
“Profit and guidance of companies overall should be better,” said Alexis Bienvenu, portfolio manager at La Financière de l’Échiquier. “In addition, if we see Trump starting negotiations and engaging in discussions, this could also give a better flavor and sentiment to markets.”
Corporate News:
Deutsche Boerse AG is nearing a deal to acquire European fund distribution platform Allfunds Group Plc for about €5.3 billion in cash and stock, according to people familiar with the matter. Quantinuum, a quantum computing company, is working with Morgan Stanley and JPMorgan Chase & Co. on an initial public offering, according to people familiar with the matter. GSK Plc agreed to buy Rapt Therapeutics, a US-based biotech developing treatments for patients with inflammatory and immunologic diseases, in a deal valued at $2.2 billion. Some of the main moves in markets:
Stocks
S&P 500 futures fell 1.6% as of 6:16 a.m. New York time Nasdaq 100 futures fell 1.9% Futures on the Dow Jones Industrial Average fell 1.4% The Stoxx Europe 600 fell 1.3% The MSCI World Index fell 0.1% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.7% to $1.1723 The British pound rose 0.3% to $1.3462 The Japanese yen rose 0.1% to 157.90 per dollar Cryptocurrencies
Bitcoin fell 1.8% to $91,262.21 Ether fell 3.3% to $3,105.72 Bonds
The yield on 10-year Treasuries advanced six basis points to 4.29% Germany’s 10-year yield advanced four basis points to 2.88% Britain’s 10-year yield advanced seven basis points to 4.48% Commodities
West Texas Intermediate crude rose 0.4% to $59.70 a barrel Spot gold rose 1.2% to $4,726.50 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling and Julien Ponthus.
©2026 Bloomberg L.P.
