Stocks Plunge After Trump's Latest Tariff Threats

Stocks sank on Wall Street on Tuesday after President Trump threatened to hit eight European countries with new tariffs as tensions escalate over his attempts to assert American control over Greenland.

• The S&P 500 fell 143.15 points, or 2.1%, to 6,796.86 in its biggest drop since October.
• The Dow Jones Industrial Average fell 870.74 points, or 1.8%, to 48,488.59.
• The Nasdaq composite fell 561.07 points, or 2.4%, to 22,954.32.

Trump said Saturday that he would charge a 10% import tax starting in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. It was the first time US markets could react to the escalation from Trump, as they were closed on Monday for Martin Luther King Jr. Day, the AP reports.

The losses were widespread and led by technology stocks, many of which already have more influence over the direction of the market because of outsized values. Retailers, banks and industrial companies also fell sharply. Nvidia, one of the most valuable companies in the world, plunged 4.3%. Amazon fell 3.4%, JPMorgan Chase fell 3.1%, and Caterpillar lost 2.5%. Companies that focus on consumer staples held up better than most of the market. Colgate-Palmolive rose 1.1% and Campbell's rose 1.5%. Industrial and consumer conglomerate 3M slumped 6.9% after reporting mixed results for its most recent quarter.

The price of US crude oil rose 1.5% to $60.34 per barrel. The price of Brent crude, the international standard, rose 1.3% to $64.76. Gold prices surged 3.7% and silver prices soared 6.9%. Such assets are often considered safe havens in times of geopolitical turmoil. The trade tensions apparently short-circuited a recent rally in bitcoin. The cryptocurrency rose above $96,000 late last week but has dropped back to around $89,300.

The trade and political conflict with Europe is heating up just as world leaders meet at the World Economic Forum annual meeting in Davos, Switzerland this week. Wedbush Securities analyst Dan Ives said the new tariff threat "is clearly an overhang on the conference," but that it would likely simmer over time. "Our view is just like over the last year the bark will be worse than the bite on this issue and tariff threats as negotiations take place and tensions ultimately calm down between Trump and EU leaders," Ives wrote in a note to clients.