Tariff Troubles: U.S.-Europe Trade Tensions Shake Global Markets

U.S. stock futures dropped after President Trump threatened additional tariffs on European nations unless the U.S. can purchase Greenland. European countries may retaliate. The resulting uncertainty impacted global markets, with currency and oil prices fluctuating and analysts predicting a tense atmosphere at the World Economic Forum.

U.S. stock futures fell sharply on Monday following President Donald Trump's threat to impose additional tariffs on European countries unless the U.S. is allowed to buy Greenland. This move sent the dollar lower against safe-haven currencies such as the yen and Swiss franc.

The sell-off was exacerbated by thin trading due to a U.S. holiday, causing S&P 500 and Nasdaq futures to drop 0.9% and 1.1% respectively. European Union member states criticized Trump's tariffs as blackmail and planned economic countermeasures, reigniting trade tensions.

Analysts warned of the economic implications, highlighting Europe's large holdings in U.S. markets. Moreover, global financial stability could be at risk, with the issues set to be a key topic at the World Economic Forum in Davos.

(With inputs from agencies.)