Stocks Retreat as Greenland Fallout Lifts Gold: Markets Wrap
(Bloomberg) — European stocks and US futures fell while havens such as gold rallied after President Donald Trump threatened levies on countries opposing his plans to acquire Greenland. The euro and Swiss franc advanced.
The Stoxx 600 dropped 1.1% after Trump announced a new 10% tariff on eight nations that said they would conduct military planning exercises in the semi-autonomous Danish territory. Auto stocks such as BMW AG were the hardest hit, while a basket of defense shares gained.
Contracts on the S&P 500 retreated 0.9% while Asian shares wavered. Haven demand pushed gold above $4,650 an ounce and lifted silver, with both metals hitting fresh highs. Bitcoin slid. The dollar fell 0.1% while Treasury futures were little changed, with German and French bonds posted muted gains. There will be no cash trading in Treasuries or US stocks due to a public holiday.
Tariff concerns are resurfacing at a time when risk appetite has been supported by resilient corporate earnings and sustained investment in artificial intelligence. The outlook will hinge in part on how Europe calibrates its response, with the European Union in talks to impose retaliatory tariffs on €93 billion of US goods.
“Markets are sensitive to the dynamic developments regarding new tariffs as a basis for negotiating security issues,” said Guillermo Hernandez Sampere, head of trading at MPPM. “Rising uncertainty, as seen last year, will weigh on all markets. The forum starting today in Davos will reflect the current situation.”
The EU is also weighing additional countermeasures beyond the tariffs, but will first try to find a diplomatic solution, according to people familiar with the discussions. Representatives from the EU’s 27 countries met Sunday to begin preparing options. Trump is set to speak in Davos on Wednesday.
“The outcome of these new trade tensions is unclear, but what has long been evident is that there is no such thing as trade or tariff certainty anymore,” analysts including Carsten Brzeski, global head of macro at ING Bank, wrote in a note to clients. “What is clear is that a full-blown trade war between the EU and the US would leave only losers.”
Trump’s threats raise the possibility of European governments trimming their holdings of US assets, supporting the euro, according to George Saravelos, Deutsche Bank’s global head of FX research. Europe is the US’s largest lender with its countries owning $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined.
What Bloomberg Strategists Say:
“The overall response across global markets is one of moving to price in broad geopolitical risk — which traders had ignored going into the weekend — rather than European asset-specific risk. That much is evident from the pattern so far: an overwhelming flight away from risk assets hitting both equities and the crypto complex, and a flight into real assets that underscores the dollar’s vulnerability.”
— Ven Ram, macro strategist. For full analysis, click here.
Meanwhile, China’s gross domestic product rose 5%, according to data released by the National Bureau of Statistics on Monday, confirming an estimate given by President Xi Jinping in a speech on New Year’s Eve and matching the expansion in 2024.
Chinese gauges fluctuated even after the country’s economic growth met the government’s target.
Traders were also watching Japan, where Prime Minister Sanae Takaichi is set to lay out her plans at a press conference later Monday for an election expected to be held as soon as Feb. 8.
The yield on 30-year debt climbed 11 basis points to 3.58%, while rates on 10- and 20-year notes rose to their highest levels since 1999.
While Trump’s threats have reignited the ‘Sell America’ trade, traders anticipate a quick rebound could support the dollar, according to David Forrester, a senior strategist at Credit Agricole in Singapore.
“The market will also be looking for the ‘TACO trade’ as Trump could be using the threat of tariffs as a negotiating ploy,” Forrester said, referring to a pattern of Trump threatening first and backing down later — a strategy some analysts refer to as TACO, or “Trump Always Chickens Out.”
Corporate News:
Nvidia Corp. supplier Micron Technology Inc. said an ongoing memory chip shortage has accelerated over the past quarter and reiterated that the crunch will last beyond this year due to a surge in demand for high-end semiconductors required for AI infrastructure. Apple Inc. retook the top spot in China after iPhone shipments jumped 28% during the holiday quarter despite a worsening shortage of vital memory chips, according to Counterpoint Research. Tesla Inc. Chief Executive Officer Elon Musk said the electric carmaker will resume work on the Dojo3 project after making progress on the design of its AI5 chip. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 1.1% as of 8:12 a.m. London time S&P 500 futures fell 0.9% Nasdaq 100 futures fell 1.3% Futures on the Dow Jones Industrial Average fell 0.8% The MSCI Asia Pacific Index was little changed The MSCI Emerging Markets Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1621 The Japanese yen was little changed at 158.11 per dollar The offshore yuan rose 0.1% to 6.9591 per dollar The British pound was little changed at $1.3392 Cryptocurrencies
Bitcoin fell 2.8% to $92,745.1 Ether fell 4.2% to $3,201.01 Bonds
The yield on 10-year Treasuries was little changed at 4.22% Germany’s 10-year yield declined two basis points to 2.82% Britain’s 10-year yield was little changed at 4.40% Commodities
Brent crude fell 0.6% to $63.74 a barrel Spot gold rose 1.7% to $4,672.99 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Macarena Muñoz.
©2026 Bloomberg L.P.
