Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) are down by nearly 2% on Tuesday, bringing the year-to-date return for both indexes to negative territory.
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President Trump reignited trade tensions after announcing a 10% tariff on eight European countries that will remain in effect until the U.S. acquires Greenland. The rate will rise to 25% on June 1 if a deal isn’t reached by then. While some believe that the TACO (Trump Always Chickens Out) theme will emerge, Trump emphasized that “There can be no going back” on Greenland.
Trump Threatens French Tariffs as Rising Yields Pressure Stocks
Looking ahead, Trump is set to meet with global leaders at the World Economic Forum Annual Meeting in Davos, Switzerland, tomorrow. Earlier today, he threatened a 200% tariff on French champagne and wine in response to French President Emmanuel Macron’s unease in joining the “Board of Peace” on Gaza.
Rising yields are also pressuring stocks, with the 10-year Treasury yield leaping to a four-month high. Higher yields can attract capital away from the stock market as investors shift funds into safer, interest-bearing bonds, reducing demand for equities.