President Donald Trump threatened tariffs on countries that oppose Greenland's sale
Investors are returning from the holiday weekend to heightened tensions between the U.S. and Europe. Futures on the Dow Jones Industrial Average (DJIA), S&P 500 Index (SPX), and Nasdaq-100 Index (NDX) are sharply lower, after President Donald Trump threatened tariffs on countries that oppose the sale of Greenland. This includes at 10% tariff starting on Feb. 1 that could rise to 25% on June 1, with Trump also threatening a 200% duty on French wines and champagne following French President Emmanuel Macron's refusal to join Trump's “Board of Peace” on Gaza.
European leaders have since called Trump's tariff threats “unacceptable" and are reportedly weighing a response, which may include the European Union's (EU) “Anti-Coercion Instrument." The 10-year Treasury yield is surging to its highest level since September in response, while the U.S. dollar is gapping lower.
- Stocks to avoid during this holiday-shortened week.
- Geopolitical risks made for a losing week on Wall Street.
- Plus, blue-chip stock sliding lower; D.R. Horton's profit beat; and behind HOOD's losses.
5 Things You Need to Know Today
- The Cboe Options Exchange saw over 3.7 million call contracts and more than 1.7 million put contracts traded on Friday. The single-session equity put/call ratio fell to 0.46, while the 21-day moving average remained at 0.58.
- The shares of 3M Co (NYSE:MMM) are 4.7% lower premarket, brushing off better-than-expected earnings and revenue for the fourth quarter. Should losses hold, the blue-chip stock may trim its 20.6% year-over-year lead.
- D.R. Horton Inc (NYSE:DHI) stock is flat before the bell, after the homebuilder announced a profit beat for its fiscal first quarter, with home sales revenue hitting $6.5 billion. DHI has added 28.6% over the last nine months.
- Robinhood Markets Inc (NASDAQ:HOOD) shares are 3.8% higher in electronic trading, as investors rotate out of riskier assets such as Bitcoin (BTC). The online trading platform stock still sports a 136% year-over-year, but should these losses hold, will be headed for a fourth-straight daily drop.
- Plenty of economic data encompasses the week of MLK Day.
Asian, European Markets Move Lower
Asian bourses were mostly lower today, as U.S. tariff threats further strained relations overseas. Japan’s Nikkei dipped 1.1%, as the nation’s 40-year government bond snapped up a record-high and rose 4%, while probable food sales tax cuts left investors concerned. Meanwhile, Hong Kong’s Hang Seng shed 0.3%, South Korea’s Kospi slid 0.4% despite hitting a record high earlier in the session, and China’s Shanghai Composite marginally fell.
European markets are lower across the board, as investors deal with potential tariffs – affecting Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands, and Finland -- imposed by Trump, surrounding the ongoing fight to buy Greenland. At last check, the German DAX is down 1.2%, while the French CAC 40 and London’s FTSE 100 are both 0.9% lower.