Wall Street closed sharply lower on Tuesday as global markets fell after U.S. President Donald Trump’s new tariff threats against Europe unsettled investors and revived fears of renewed volatility.

A broad risk-off mood swept through financial markets after Trump said Washington would impose fresh 10% import tariffs on a group of European countries from 1 February, rising to 25% on 1 June, unless the U.S. secured a deal to purchase Greenland.

The announcement pushed investors toward safe-haven assets and sent gold to new record highs while equities retreated across Asia, Europe and the U.S.

The S&P 500 fell 2.06% to 6,796.86, the Nasdaq Composite dropped 2.39% to 22,954.32 and the Dow Jones Industrial Average lost 1.76% to close at 48,488.59.

Traders also saw renewed selling pressure in U.S. Treasuries as markets digested the scale of the trade measures and the political signal behind them.

At the New York Stock Exchange, analysts said the Greenland dispute had become an unexpected catalyst for broader concern over Trump’s escalating economic actions.

Robert Conzo of The Wealth Alliance described the day as feeling like a “tipping point”, noting that the standoff over Greenland came on top of tensions involving Venezuela, U.S. immigration policy, pressure on the Federal Reserve and the President’s push for a global peace board.

Conzo said markets were now trying to judge whether Trump would push the confrontation further or pivot toward negotiations with European leaders, after recent periods in which volatility indicators such as the VIX had been subdued.

He added that investors were assessing whether the latest move would trigger a deeper correction or simply a sharp, temporary pullback as the administration’s strategy became clearer.

European leaders have repeatedly dismissed any prospect of selling Greenland, an autonomous territory of Denmark, and criticised the tariff threats as destabilising.

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• Trump tariff threat ‘a maximalist move’ on Europe over Greenland
• Greenland row: EU prepares retaliation to Trump tariffs

The dispute has added a new layer of uncertainty ahead of the World Economic Forum in Davos, where Trump is expected to press his case directly with several counterparts.

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