Thursday, January 22, 2026- U.S. stock markets experienced a sharp sell‑off as President Donald Trump’s aggressive push over Greenland including threatened tariffs on several European allies rattled investors and triggered broad risk‑off sentiment.
On Tuesday, the Dow Jones Industrial Average plunged roughly 870 points, while the S&P 500 and Nasdaq also recorded steep losses, marking one of the worst trading sessions since late last year as traders reacted to escalating geopolitical and trade tensions. The surge in volatility reflected concerns that Trump’s strategy could spark a U.S.–Europe trade conflict and unsettle global economic stability.
The sell‑off was not limited to equities U.S. government bonds also saw turbulence, with yields climbing amid indications of capital reallocations, and the U.S. dollar weakened against major currencies as confidence in American assets wavered.
Traditionally, investors seek safety in Treasurys and the dollar during periods of uncertainty, but this time the downward pressure on both stocks and bonds suggested broader wariness about the implications of trade and diplomatic strife. Gold prices surged as traders rotated into safe‑haven assets.
Market reactions underscored fears of “capital flight” from U.S. instruments if geopolitical tensions persist, particularly given Europe’s large holdings of U.S. bonds and equities, which analysts have highlighted as a structural vulnerability when political risk premiums rise.
However, in the following session, markets rebounded sharply after Trump signaled a diplomatic framework and backed away from immediate tariff implementation, illustrating how sensitive current investor sentiment remains to policy shifts on Greenland and transatlantic relations.
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