Wall Street braced for chaos as Trump Greenland tariff sends stock futures tumbling amid 'trade bazooka'
US stock futures slid during the Martin Luther King holiday giving a grim clue to what is coming on Wall Street tomorrow.
The drop came as traders reacted to President Donald Trump’s threat of fresh tariffs against eight European allies, part of his escalating campaign to acquire Greenland, a semi-autonomous territory of Denmark.
Dow futures were down more than 400 points, or over 0.8 percent, while S&P 500 and Nasdaq futures fell by more than 1 percent.
Although US stock markets are closed on public holidays, futures contracts — essentially bets on where the market is headed once regular trading resumes — continue to trade.
They are viewed as a warning sign of how Wall Street will open. It means stocks are set to drop when markets reopen on Tuesday morning, extending losses from Friday.
European stocks broadly fell Monday with the Stoxx 600 dropping more than 1 percent as well.
The president posted his warning to Denmark, Norway, Sweden, France, Germany, the UK, Netherlands, and Finland on his Truth Social account.
He said that from June 1, 2026, tariffs on those countries would rise to 25 percent and remain in place ‘until such time as a deal is reached for the complete and total purchase of Greenland’.
On Saturday, Trump announced that he would impose new tariffs on EU countries if they stood in his way to take over Greenland
A Danish soldier during training at an undisclosed location in Greenland on Sunday
A worried Wall Street trader watches market screens as stock futures slide, signaling potential losses when trading resumes.
On Sunday, European Union diplomats agreed to a possible use of the bloc’s Anti-Coercion Instrument — which officials have dubbed a ‘trade bazooka’ — as a possible retaliatory response to President Trump’s hard-line stance.
The measure could severely restrict US businesses from EU markets, government bids and making direct investments,
A package of $108 billion in tariffs on American goods and services beginning in February could also be on offer.
The potential reignition of a trade conflict comes even as US inflation remains stubbornly high, growing to 2.7 percent in December. Tariffs are a key factor on prices staying high.
Meanwhile, economists warn a new trade war over Greenland could lead to the worst global downturn since 2009.
Consultancy Oxford Economics said that if the US follows through on its threat to impose an extra 25 percent tariff on European countries — and the move is met with like-for-like retaliation — US gross domestic product would fall 1 percent.
The hit to the eurozone would be similar.
Spillover effects on other countries would further weigh on growth, with global GDP down 2.6 percent in both 2026 and 2027 — the weakest annual pace since 2009, excluding the pandemic years.
Trump will find himself in Europe this week in Davos amid the ongoing tensions, thought Denmark itself will not be attending.
