U.S. President Donald Trump takes questions from the media during a press briefing in the James S. Brady Press Briefing Room of the White House on Jan. 20, 2026 in Washington, DC.
Win McNamee | Getty Images
Markets on Tuesday flashed the classic signs of a “sell America” trade, as investors recoiled from escalating risks tied to Washington’s foreign policy.
Major U.S. indexes tumbled in their worst day since October, pushing the S&P 500 and Nasdaq Composite into negative territory for 2026. Volatility jumped, with the VIX index, Wall Street’s “fear gauge,” spiking to a high of 20.99. Meanwhile, bond yields jumped, the U.S. Dollar Index fell and gold prices hit new records.
Those moves reflected concerns raised by Ray Dalio, founder of Bridgewater Associates, who warned that mounting tensions could spill into capital markets.
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.
“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 Davos, Switzerland.
One early signal emerged from Denmark. Pension fund AkademikerPension said it will sell roughly $100 million in U.S. Treasurys.
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.”
U.S. officials, for their part, struck a defiant tone. Treasury Secretary Scott Bessent told CNBC at Davos that “the U.S. is back, and this is what U.S. leadership looks like.” Bessent made those comments before markets closed Tuesday.
International reaction to Trump’s moves has been far less receptive. Greenlanders are “bewildered” by the U.S. president, the arctic island’s business minister told CNBC on Tuesday, while French President Emmanuel Macron hit out at “bullies” and “brutality” — without giving specifics — as he called for U.S. tariffs on Europe to be abolished.
But, amid the furor in recent days, Trump doesn’t appear to be backing down.
“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.”
Trump may be right. The more immediate question rattling markets is: work out pretty well for whom?
What you need to know today
U.S. markets slump on Greenland jitters. The S&P 500 tumbled 2.06%, the Dow Jones Industrial Average shed 1.76% and the Nasdaq Composite lost 2.39%. It was the worst session since October for all three indexes. The pan-European Stoxx 600 lost 0.7%.
Danish pension fund to sell Treasurys. AkademikerPension said it is exiting its position of around $100 million in U.S. Treasurys, citing fiscal concerns. Greenlanders, meanwhile, are “bewildered” by Trump’s “devastating” bid to annex the Arctic island, its business minister told CNBC.
India signs $3 billion LNG agreement with the UAE. Under the deal, New Delhi will be the UAE’s largest customer of liquefied natural gas. India also announced Monday it plans to double bilateral trade with the UAE to $200 billion by 2032.
Netflix posts narrow earnings beat. Fourth-quarter earnings per share 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 amended its Warner Bros. Discovery offer to an all-cash bid.
[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.