Mr. Trump's tariff move related to Greenland stirred up the market, triggering a sell-off on Wall Street.
Wall Street on January 20 closed the trading session with the sharpest decrease in 3 months, as investors reacted to US President Donald Trump's new tax threats related to Greenland. All 3 major indices of the US stock market simultaneously plummeted in a widespread sell-off session, reflecting increased risk avoidance sentiment.
S&P 500 fell 143.15 points, equivalent to 2.06%, to 6,796.86 points. Nasdaq Composite lost 561.07 points, down 2.39%, to 22,954.32 points. Dow Jones Industrial Average retreated 870.74 points, equivalent to 1.76%, closing at 48,488.59 points.
This is the strongest decrease of all 3 indices since October 10, 2025, while the S&P 500 and Nasdaq both fell below the 50-day moving average.
This session is the first time US investors can react to Mr. Trump's weekend statements due to the US stock market's Martin Luther King Jr. holiday.
Mr. Trump announced that he would impose an additional 10% import tax from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK. This tax rate will increase to 25% from June 1 and remain until the US reaches an agreement to buy Greenland, although the leaders of Greenland and Denmark affirmed that the island is not for sale.
Tariff threats raise concerns about the return of market volatility that has appeared in previous periods of trade tensions.
The CBOE VIX volatility index soared to 20.09 points, the highest closing level since the end of November. Trading volume also increased sharply, with about 20.6 billion shares traded, significantly higher than the 20-session average.
Risk-avoidance sentiment is spreading to other markets. Gold prices set new records while US government bond yields fluctuated sharply, especially for long terms. Bitcoin fell more than 3%.
Japanese government bonds were sold off, pushing yields to record highs, in the context of Prime Minister Sanae Takaichi calling for early elections, raising concerns about the fiscal situation.
Despite the market fluctuating, Mr. Jamie Cox - executive partner at Harris Financial Group - said that there are no signs of investors massively withdrawing from stocks and he would be surprised if the market fell deeply by 3-5% in just 1 week.
Investors are still following more US economic data and the profit reporting season is accelerating to assess the long-term impact of new trade tensions.
