A sharp sell-off hit Wall Street as renewed fears of a trade war between the U.S. and Europe emerged following President Donald Trump's push to purchase Greenland. Trump announced plans on Truth Social to impose a 10% tariff on imports from several European nations, including Denmark, France, Germany, and the U.K., starting February 1, rising to 25% by June unless the U.S. secures the territory he calls vital for national security.

'Comments from the U.S. president that there is 'no going back' on Greenland have sent U.S. indices down sharply today,' said AJ Bell's Danni Hewson, noting global uncertainty over Trump's intentions. She added that the surge in gold prices reflects investor anxiety, with many turning to safe-haven assets as tensions threaten to escalate further.

Housing stocks turned in some of the market's worst performances dragging the Philadelphia Housing Sector Index down by 2.5%. Airline stocks were significantly weak, with the NYSE Arca Airline Index tumbling by 2.4%. Networking, brokerage and retail stocks saw considerable weakness while gold stocks moved sharply higher along with the price of the precious metal. Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index tumbled by 1.1% while Hong Kong's Hang Seng Index dipped by 0.3%. The major European markets have also moved to the downwards.

In the bond market, treasuries extended the steep drop. As a result, the yield on the benchmark ten-year note which moves opposite of its price, jumped 6.4 bps to a five-month closing high of 4.29%.

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