US, European markets sink as Greenland stoush shatters calm

Wall Street returned from its long weekend to a renewed bout of fear as US President Donald Trump continues to ramp up his rhetoric over his desire to add Greenland to the world’s biggest economy, with stocks sinking on both sides of the Atlantic.

US tech stocks were the hardest hit on Wall Street with Nvidia, Amazon and Apple among those pacing declines on the blue-chip Dow Jones Industrial Average, while 3M slumped after its chief executive warned the latest tariff threat could cost the maker of Post-it notes as much as US$40 million this year.

Meanwhile, Warner Bros Discovery and Netflix were both on the green side of the ledger after reaching a new all-cash deal for the Warners studio and HBO Max streaming to join the Netflix fold, keeping the value of the businesses at US$72 billion.

And locally, Sharesies’ latest quarterly index showed a slight dip in confidence at the end of the December quarter, having scaled more optimistic heights earlier in the period when the investment platform enjoyed its busiest trading month ever.

Sell America

Wall Street resumed trading on Tuesday from its long weekend after the Martin Luther King Jr Day public holiday, with investors unnerved by US President Donald Trump’s mounting pressure on Europe to acquiesce to his push to acquire Greenland. The Dow Jones Industrial Average dropped 1.3% in late trading, while the tech-heavy Nasdaq Composite was down 1.7%, with the likes of Nvidia, Amazon and Apple among those pacing declines on the Dow.

Trump raised the temperature ahead of his keynote speech to the World Economic Forum in Davos on Wednesday, saying the US is the only country that can maintain peace, and Wall Street’s fear gauge – the volatility index – jumped 25% to 19.8.

Materials maker 3M slumped 7.7%, posting the biggest decline on the S&P 500 after chief executive Bill Brown said Trump’s threatened tariffs against eight nations over their opposition to Trump’s Greenland bid could cost the company between US$30 million and US$40 million this year.

A spike in Japanese bond yields yesterday added to the uneasy tone as yields on the nation’s 40-year bond hit 4% for the first time. The yield on US 10-year treasuries increased 2 basis points to 4.28%, and the greenback was among the clutch of US assets spurned by investors, with the kiwi dollar climbing to 58.41 US cents at 7am in Auckland from 58.23 cents yesterday.

“Throughout this period of market angst, the NZ dollar is proving to be a safe-haven, extending its lead at the top of the leaderboard for year-to-date performance for the majors,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Domestic factors, such as convincing signs of an economic recovery taking hold and the likelihood of this Friday’s Q4 CPI data showing sticky inflation around 3% have added to NZ dollar support,” he said, referring to the December quarter consumers price index.

Going for gold

Stocks in Europe were similarly knocked, with the UK’s FSTE 100 falling 0.7%, Germany’s DAX 30 down 1% and France’s CAC 40 declining 0.6%, while gold remained the go-to for investors, with futures up 3.6% at US$4,762 an ounce at 7am in Auckland, and Bitcoin continued to be unloved, falling 3.7% to US$89,687.

It wasn’t all one-way traffic as Netflix and Warner Bros Discovery and Netflix both nudged higher after the media groups struck a new all-cash deal for Netflix to buy the Warners studio and HBO Max streaming businesses, keeping the value at US$72 billion. Warner Bros has been fending off a rival bid from Paramount Skydance.

The downbeat tone is set to carry through to the antipodes, with Australian futures pointing to a 0.4% decline for the S&P/ASX 200 index when trading opens across the Tasman. A clutch of energy and minerals companies are reporting in Australia today, including Rio Tinto, which is pursuing a potential merger with Glencore.

Domestically, prime minister Christopher Luxon is being tipped to announce the election date today as his National party holds its first caucus retreat for the year. No major data are due today.

And investment platform Sharesies has released its quarterly index, showing a dip in confidence across its 930,000 or so users with a reading of 45 at the end of December, compared to the 56 level at the end of September.

The index peaked at 62 in the month of October, when the platform registered recording trading of $1.9 billion, and Sharesies head of data and analytics Jordan Cunningham noted a surge in deposits during several weeks in December. Net deposits more than doubled to $1.7 billion in calendar 2025.

“This suggests investors were positioning themselves for the year ahead,” she said in a statement.

Reporting by Paul McBeth. Image from Tiraya Adam on Unsplash.