Dow drops 600 points as Trump’s Greenland scheme sparks U.S. capital flight, fear of global trade war

Stocks suffered big losses Tuesday after President Donald Trump intensified his rhetoric on Greenland, threatening to impose new tariffs on countries opposing the sale of the Danish territory to the United States.

Treasury yields spiked and the U.S. dollar declined as Trump’s threat caused a flight from U.S. assets.

The Dow Jones Industrial Average shed 680 points, or 1.4%. The S&P 500 also dipped 1.6%, and the Nasdaq Composite slid 1.8%. The day’s losses sent the S&P 500 and Nasdaq lower on the year, with the former dropping 0.2% and the Nasdaq down 0.7%. The Cboe Volatility Index (VIX) — Wall Street’s “fear gauge” — spiked to a high of 20.69, a level not seen since Nov. 25. It was last trading above 19.

Trump announced in a Truth Social post on Saturday that eight NATO members’ U.S. imports will face escalating tariffs “until such time as a Deal is reached for the Complete and Total purchase of Greenland.” The tariffs will start at 10% on Feb. 1 and rise to 25% on June 1, Trump said.

Trump then threatened to impose 200% tariffs on French wines and champagne amid reports that the country’s president, Emmanuel Macron, is unwilling to join his so-called Board of Peace. Trump also hit out at the U.K., labeling the British government’s plan to hand over sovereignty of the Chagos Islands — one of which is the site of a U.K.-U.S. military base — to Mauritius as an “act of great stupidity.” He said the move was “another in a very long line of National Security reasons why Greenland has to be acquired.”