U.S. President Donald Trump looks on during a press briefing at the White House, on the one-year mark into his second term in office, in Washington, D.C., U.S., Jan. 20, 2026. <\/p>\n
Nathan Howard | Reuters<\/p>\n
Markets on Tuesday flashed the classic signs of a “sell America” trade<\/a>, as investors recoiled from escalating risks tied to Washington’s foreign policy. <\/p>\n Greenland’s Prime Minister Jens-Frederik Nielsen drove home the point when he said late Tuesday that “the other side” \u2014 seemingly alluding to the U.S. \u2014 has not ruled out the use of military force<\/a> to take control of the island.<\/p>\n Major U.S. indexes on Tuesday stateside tumbled in their worst day since October, pushing the S&P 500<\/a> and Nasdaq Composite<\/a> into negative territory for 2026. Volatility climbed, with the VIX index<\/a>, Wall Street’s “fear gauge,” spiking to a high of 20.99. Meanwhile, bond yields jumped, the U.S. Dollar Index<\/a> fell and gold<\/a> prices hit new records.<\/p>\n Those moves reflected concerns raised by Ray Dalio, founder of Bridgewater Associates, who warned that mounting tensions could spill into capital markets.<\/p>\n Dalio said Tuesday that U.S. President Donald Trump’s aggressive moves toward annexing Greenland could prompt foreign governments and investors to reconsider their appetite for U.S. assets.<\/a><\/p>\n “On the other side of trade deficits and trade wars, there are capital and capital wars,” Dalio told CNBC’s “Squawk Box” at the World Economic Forum in\u00a0Davos<\/a>, Switzerland.<\/p>\n One early signal emerged from Denmark. Pension fund AkademikerPension<\/a> said it will sell roughly $100 million<\/a> in U.S. Treasurys.<\/p>\n The decision was driven by concerns over “poor [U.S.] government finances” and “not directly related to the ongoing rift between the [U.S.] and Europe,” said Anders Schelde, the fund’s investing chief, though he added that recent tensions between the U.S. and Europe “didn’t make it more difficult to take the decision.”<\/p>\n U.S. officials, for their part, struck a defiant tone. Treasury Secretary Scott Bessent told CNBC at Davos that “the U.S. is back<\/a>, and this is what U.S. leadership looks like.” Bessent made those comments before markets closed Tuesday.<\/p>\n International reaction to Trump’s moves has been far less receptive. Greenlanders are “bewildered” by the U.S. president<\/a>, the arctic island’s business minister told CNBC on Tuesday, while French President Emmanuel Macron hit out at “bullies” and “brutality”<\/a> \u2014 without giving specifics \u2014 as he called for U.S. tariffs on Europe to be abolished.<\/p>\n But, amid the furor in recent days, Trump doesn’t appear to be backing down.<\/p>\n \u00a0“I’m leaving tonight, as you know, Davos, and we have a lot of meetings scheduled on Greenland,” Trump said Tuesday. “I think things are going to work out pretty well.” <\/p>\n Trump may be right. The more immediate question rattling markets is: work out pretty well for whom?<\/p>\n What you need to know today<\/p>\n Be prepared for ‘everything’: Greenland PM. Jens-Frederik Nielsen, the island’s prime minister, said Tuesday that it is “not likely that there will be a use of military force, but it has not been ruled out yet<\/a>” by the U.S.\u00a0<\/p>\n U.S. markets slump on Greenland jitters. On Tuesday, the S&P 500 tumbled 2.06%<\/a>, the Dow Jones Industrial Average shed 1.76% and the Nasdaq Composite lost 2.39%. Asia-Pacific markets mostly fell<\/a> Wednesday, while spot gold prices rose further to notch a new record.<\/p>\n UK inflation in December hotter than expected. The consumer price index rose to 3.4%<\/a> for the month, higher than forecasts of 3.3% from economists polled by Reuters. Core inflation was unchanged from November. The figures raise doubts over whether the BOE will proceed with its expected February rate cut.<\/p>\n Netflix posts narrow earnings beat. Fourth-quarter earnings per share<\/a> came in at 56 cents, one cent higher than estimated, while revenue was $12.05 billion vs. $11.97 billion forecasted. Earlier on Tuesday, Netflix<\/a> amended its Warner Bros. Discovery<\/a> offer to an all-cash bid<\/a>.<\/p>\n [PRO] Doubts that Greenland sell-off will last. Wall Street analysts said that despite surprise over Trump’s “weaponization of tariffs,” tensions could eventually cool<\/a>.<\/p>\n