Wall Street sinks as Trump threatens 8 European countries with tariffs over Greenland

NEW YORK (AP) — Stocks slumped on Wall Street Tuesday after President Donald Trump threatened to hit eight European countries with new tariffs as tensions escalate over his attempts to assert American control over Greenland.

The losses were widespread, with nearly every sector losing ground. Major indexes in the U.S. extended losses from last week in what has been a wobbly start to the year.

The S&P 500 fell 143.15 points, or 2.1%, to 6,796.86. It is the steepest drop for the benchmark index since October.

The Dow Jones Industrial Average fell 870.74 points, or 1.8%, to 48,488.59. The Nasdaq composite fell 561.07 points, or 2.4%, to 22,954.32.

Technology stocks were the heaviest weights on the market. Nvidia, one of the most valuable companies in the world, plunged 4.4%. Apple fell 3.5%.

Retailers, banks and industrial companies also fell sharply. Lowe’s fell 3.3%, JPMorgan Chase fell 3.1%, and Caterpillar lost 2.5%.

European markets and markets in Asia fell. Long-term bond yields in Japan rose to record levels on concerns over the government’s fiscal policy, adding to anxiety in global markets.

Trump’s trade policy has roiled markets since the start of his second term. Stocks have sold off on the threat of steep tariffs, then rallied when Trump delays or cancels a tariff, or negotiates a lower rate.

Trump said Saturday that he would charge a 10% import tax starting in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland. The annual combined imports from European Union nations are greater than those from the top two biggest individual importers into the U.S., Mexico and China.

Gold prices surged 3.7% and silver prices soared 6.9%. Such assets are often considered safe havens in times of geopolitical turmoil.

The trade tensions apparently short-circuited a recent rally in bitcoin. The cryptocurrency rose above $96,000 late last week but has dropped back to around $89,700.

Treasury yields were mixed in the bond market. The yield on the 10-year Treasury rose to 4.29% from 4.23% late Friday. The yield on the two-year Treasury held steady at 3.60% from late Friday.

Companies that focus on consumer staples held up better than most of the market. Colgate-Palmolive rose 1.1% and Campbell’s rose 1.5%.

The price of U.S. crude oil rose 1.5% to $60.34 per barrel. The price of Brent crude, the international standard, rose 1.5% to $64.92.

Trump linked his aggressive stance on Greenland to last year’s decision not to award him the Nobel Peace Prize, telling Norway’s prime minister that he no longer felt “an obligation to think purely of Peace,” in a text message released Monday.

Trump’s message to Jonas Gahr Støre appeared to ratchet up a standoff between Washington and its closest allies over his threats to take over Greenland, a self-governing territory of NATO member Denmark.

Trump’s threats have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider possible countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion instrument.

The trade and political conflict with Europe is heating up just as world leaders meet at the World Economic Forum annual meeting in Davos, Switzerland this week. Wedbush Securities analyst Dan Ives said the new tariff threat “is clearly an overhang on the conference,” but that it would likely simmer over time.

“Our view is just like over the last year the bark will be worse than the bite on this issue and tariff threats as negotiations take place and tensions ultimately calm down between Trump and EU leaders,” Ives wrote in a note to clients.

Tariffs threaten to boost inflation, although so far the increases have been less than many experts feared. Still, the threat of tariffs reigniting already high inflation could further complicate the Federal Reserve’s job.

The central bank cut its benchmark interest rate three times late in 2025 to help bolster the economy as the job market weakened. The Fed has taken a more cautious view because of the risk of rising inflation, which remains above its target of 2%.

Lower interest rates on loans can help bolster economic activity, but they could also fuel inflation, which could counter any benefit from lower interest rates.

The Fed, and Wall Street, will get another update on inflation on Thursday, when the government releases the personal consumption expenditures price index, or PCE. It is the Fed’s preferred measure for inflation.

The Fed will meet next week for its policy meeting on interest rates and Wall Street is betting that the central bank will hold its benchmark interest rate steady.

Wall Street is also in the midst of the latest round of corporate earnings, which could help provide more insight into how companies are handling uncertainty from tariffs, geopolitics and cautious consumers.

Industrial and consumer conglomerate 3M slumped 7% after reporting mixed results for its most recent quarter. Companies from a wide range of industries will report their results this week, including Johnson & Johnson, Halliburton and Intel.

AP Business Writers By Yuri Kageyama and Matt Ott contributed to this report.

A screen above the trading floor of the New York Stock Exchange displays the closing number for the Dow Jones industrial average, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Off The Hook Yachts President Jason Ruegg gavels trading closed at the New York Stock Exchange, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Specialist Anthony Matesic, left, and trader Fred Demarco work on the floor of the New York Stock Exchange, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Trader Chris Lagana works on the floor of the New York Stock Exchange, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Trader Vincent Napolitano, left, on the floor of the New York Stock Exchange, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Morning commuters pass the New York Stock Exchange, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Morning commuters pass the New York Stock Exchange, Tuesday, Jan. 20, 2026. (AP Photo/Richard Drew)

Options trader Steven Rodriguez works on the floor of the New York Stock Exchange, Friday, Jan. 16, 2026. (AP Photo/Richard Drew)

Options trader Kirk Katzburg, center, works on the floor of the New York Stock Exchange, Friday, Jan. 16, 2026. (AP Photo/Richard Drew)

FILE - President Donald Trump speaks with reporters before boarding Air Force One at Lehigh Valley International Airport in Allentown, Pa., Aug. 3, 2025. (AP Photo/Julia Demaree Nikhinson, File)

A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Jan. 19, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Jan. 19, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Jan. 20, 2026. (AP Photo/Ahn Young-joon)

People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Jan. 19, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A currency trader reacts near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, left, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Jan. 20, 2026. (AP Photo/Ahn Young-joon)

NEWARK, N.J. (AP) — Mikie Sherrill, the four-term congresswoman and former Navy helicopter pilot who cast her November election in New Jersey as a victory over President Donald Trump's vision for the country, was inaugurated Tuesday as the state's 57th governor.

Sherrill, 54, is just the second woman to lead the state of nearly 9.5 million people. She succeeds Phil Murphy, a fellow Democrat who was elected twice, marking the first time in more than six decades a political party has controlled the New Jersey governor's office for three straight terms.

She swept to victory over her Trump-endorsed GOP rival in part by pinning blame for high costs on the president's tariffs and promising that her first action once in office would be to order a freeze on skyrocketing utility rates.

Sherrill spoke about New Jersey’s role in the Revolutionary War and quoted from the Declaration of Independence’s grievances against the king, drawing a comparison to Trump.

“We see a president illegally usurping power,” she said. “He has unconstitutionally enacted a tariff regime to make billions for himself and his family, while everyone else sees costs go higher and higher. Here, we demand people in public service actually serve the public.”

She adopted a defiant tone against the Trump administration, saying the state would not remain quiet in the face of communities living in fear of the president's immigration crackdown.

“These are some weary years,” she said. “But I’ll be damned if in this state, at this time, we cry any silent tears.”

During her speech she also signed two executive orders, one declaring a freeze on utility rates, which have been rising sharply, and another aimed at establishing new sources of electricity production incident solar and nuclear.

Sherrill took the oath of office on a copy of the Constitution owned by the state's first governor in Newark, the state's largest city whose voters made up a key component of her winning coalition.

It is a departure from previous inaugurations, which have included military artillery salutes along the Delaware River outside the statehouse in Trenton. Tuesday's ceremony included a similar gun salute and a military helicopter flyover.

She is being sworn in as her former congressional colleague Abigail Spanberger comes into office in as Virginia's governor after a similar double-digit victory over her Republican opponent and as the midterm elections start to come into sharper focus. Democrats are hopeful the president will be a drag on GOP candidates in key races across the country.

Sherrill takes over from Murphy, a former Obama administration ambassador and Wall Street finance executive, who delivered on a number of progressive promises over eight years, including raising taxes on income over $1 million, boosting the minimum wage, expanding early childhood education and fully funding the state workers' pension, which was underfunded for years before he took over.

Murphy said Friday in his final news conference that he has been in regular touch with Sherrill about the transition. He summed up his two terms as governor as having lived up to promises he made on the campaign trail.

“We were who we said would be,” Murphy said. “We didn’t campaign on my thesis and pull a fast one.”

He is also passing along a state budget that has swelled over the years, raising the prospect of potential shortfalls if state revenues dip as well as an unfunded promise to continue a property tax relief program begun in the governor’s second term.

Sherrill will have a Democrat-led Legislature to work with, one of more than a dozen where the party controls the legislature and governorship.

The first woman to be governor of New Jersey is Christine Todd Whitman, a two-term Republican who went on to serve as George W. Bush's Environmental Protection Agency administrator.

New Jersey's governorship has often switched back and forth between the parties. The last time the same party prevailed in a third straight gubernatorial election was in 1961.

New Jersey Gov. Mikie Sherrill stands as an honor guard passes by during her inauguration ceremony in Newark, N.J., Tuesday, Jan. 20, 2026. (AP Photo/Seth Wenig)

New Jersey Gov. Mikie Sherrill prepares to speak after taking the oath of office during an inauguration ceremony, Tuesday, Jan. 20, 2026, in Newark, N.J. (AP Photo/Seth Wenig)

People stand and applaud for New Jersey Governor Mikie Sherrill during her inauguration ceremony in Newark, N.J., Tuesday, Jan. 20, 2026. (AP Photo/Seth Wenig)

New Jersey Gov. Mikie Sherrill holds up a just signed executive order during her inauguration ceremony in Newark, N.J., Tuesday, Jan. 20, 2026. (AP Photo/Seth Wenig)

New Jersey Governor-elect Mikie Sherrill reacts as she arrives for her inauguration, Tuesday, Jan. 20, 2026, in Newark, N.J. (AP Photo/Seth Wenig)

New Jersey Governor-elect Mikie Sherrill greets supporters as she arrives for her inauguration, Tuesday, Jan. 20, 2026, in Newark, N.J. (AP Photo/Seth Wenig)

New Jersey Governor-elect Mikie Sherrill waves as she arrives for her inauguration, Tuesday, Jan. 20, 2026, in Newark, N.J. (AP Photo/Seth Wenig)

FILE - New Jersey Gov.-elect Rep. Mikie Sherrill, D-N.J., left, prepares for a television interview at the U.S. Capitol, Wednesday, Nov. 12, 2025, in Washington. (AP Photo/Rod Lamkey, Jr., File)