All three major Wall Street indexes closed lower on Wednesday after posting their biggest daily declines in three months.
The development sparked a massive sell-off in stocks by investors following new tariff threats from US President Donald Trump against the European Union (EU) that risked triggering fresh market volatility.
Trump had previously warned that 10% tariffs would be imposed on goods from Denmark, Sweden, France, Germany, Finland, the Netherlands, Norway and the United Kingdom (UK).
In a post on Truth Social, he said the tariffs would rise to 25% on June 1, until the US deal to take over Greenland is approved by the EU.
All three US equity benchmarks recorded their worst performance since October 10, 2025, with the S&P 500 and Nasdaq Composite falling below their 50-day moving averages.
In terms of market performance, the S&P 500 index plunged 2.06% to 143.15 points, the Dow Jones fell 1.76% to 870.74 points, while the Nasdaq Composite fell 2.39% to 561.07 points.
In other developments, Japanese financial markets were also turbulent yesterday following the announcement of a surprise election by Prime Minister Sanae Takaichi.
This situation saw a simultaneous fall in the value of bonds, Tokyo stocks and the yen, thus pushing bond yields to record highs due to concerns about the country's fiscal stability.
The situation also pushed up the cost of long-term European government bonds, while the massive sell-off in US Treasuries was more pronounced on the long-term yield curve.
Investors' attention is now focused on key economic data this week including the update on the US third-quarter Gross Domestic Product (GDP), the January Purchasing Managers' Index (PMI) reading and the Personal Consumption Expenditures (PCE) report, which is the Federal Reserve's (Fed) preferred measure of inflation.
