U.S. Stocks May Come Under Pressure Amid Renewed Trade War Concerns

Following the long weekend, stocks are likely to come under pressure in early trading on Tuesday. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1.4 percent.

Renewed concerns about a trade war between the U.S. and Europe over President Donald Trump’s efforts to take control of Greenland are likely to weigh on the markets.

Trump has threatened to impose new tariffs on several European nations if they oppose his attempt to purchase the Danish territory, which he claims is imperative for national security.

In a post on Truth Social, Trump announced plans to impose a 10 percent tariff on imports from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland beginning February 1st.

Trump said the tariffs would be increased to 25 percent beginning June 1st and would remain in place until a deal is reached for the U.S. to purchase Greenland.

“Investors will be hoping for some sort of de-escalation deal on Greenland which removes the risk of a break-up or at least serious rupture in the Nato alliance,” said AJ Bell investment director Russ Mould. “If the crisis deepens it is unlikely to spell good news for global equities.

He added, “Nasdaq looks set to chalk up the biggest declines amid concern about possible retaliatory action from Europe against America’s big tech contingent.”

Stocks moved to the upside in early trading on Friday but quickly gave back ground and showed a lack of direction over the remainder of the trading session.

The major averages spent much of the day bouncing back and forth across the unchanged line before eventually closing modestly lower.

The Dow dipped 83.11 points or 0.2 percent to 49,359.33, the Nasdaq slipped 14.63 points or 0.1 percent to 23,515.39 and the S&P 500 edged down 4.46 points or 0.1 percent to 6,940.01.

For the week, the tech-heavy Nasdaq slid by 0.7 percent, while the S&P 500 and the Dow fell by 0.4 percent and 0.3 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1.1 percent, while Hong Kong’s Hang Seng Index dipped by 0.3 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is down by 1.2 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 0.9 percent.

In commodities trading, crude oil futures are climbing $0.57 to $60.01 a barrel after rising $0.25 to $59.44 a barrel last Friday. Meanwhile, after falling $28.30 to $4,595.40 in the previous session, gold futures are surging $128.40 to $4,723.80 an ounce.

On the currency front, the U.S. dollar is trading at 157.70 yen compared to the 158.10 yen it fetched on Monday. Against the euro, the dollar is trading at $1.1748 compared to yesterday’s $1.1645.