US stocks suffered their worst day since October on Tuesday as transatlantic tensions flared over US President Donald Trump’s efforts to seize Greenland.
The dramatic rout — which also saw the dollar fall, while long-term Treasury bond yields ticked up — suggested traders’ willingness to shrug off geopolitical shocks “is beginning to erode,” Bloomberg wrote.
Trump’s use of tariff threats for territorial gains, rather than a domestic economic goal, is new, making the potential fallout more unpredictable.
“A country will tolerate a lot of economic misery rather than giving up territory,” The Wall Street Journal’s economics commentator argued.
Another round of tariffs, coupled with European retaliation, could reignite fears of a US slowdown, while denting Europe’s GDP, Goldman Sachs analysts said.
