US futures edge higher and gold hits another record as markets swoon over Greenland dispute

Asian markets faltered Wednesday as President Trump’s tariff threats against Greenland rippled through global trading, pushing gold prices to an unprecedented high above $4,800 amid growing investor uncertainty.

The tensions came as Trump prepared to deliver a speech at the Davos World Economic Forum in Switzerland, though his journey was briefly delayed when Air Force One returned to Washington due to “a minor electrical issue,” requiring him to board another aircraft.

U.S. futures showed modest recovery after Tuesday’s steep Wall Street selloff, with S&P 500 futures rising 0.3% and Dow Jones Industrial Average futures up 0.2%. The previous day saw the S&P 500 tumble 2.1% to 6,796.86, its worst decline since October, while the Dow fell 1.8% to 48,488.59 and the Nasdaq dropped 2.4% to 22,954.32.

Investor anxiety has intensified following Trump’s announcement that he would impose 10% tariffs on Denmark, Norway, Sweden, Germany, France, the United Kingdom, the Netherlands and Finland beginning in February. These would supplement a 15% tariff outlined in a yet-to-be-ratified trade agreement with the European Union.

European leaders are reportedly considering countermeasures, including potential retaliatory tariffs or delaying ratification of the existing trade agreement. The diplomatic tension stems partly from Trump’s unusual grievance over Greenland, which he reportedly linked to not receiving the Nobel Peace Prize last year. In comments to Norway’s prime minister, Trump indicated he no longer felt “an obligation to think purely of Peace.”

In Tokyo, the Nikkei 225 declined 0.7% to 52,603.44 amid both global concerns and domestic political developments. Japanese Prime Minister Sanae Takaichi has called a snap election for February 8, causing yields on long-term government bonds to reach record levels. Market analysts believe Takaichi is attempting to consolidate a majority for her Liberal Democratic Party, potentially through tax cuts and increased spending—policies that could exacerbate Japan’s already substantial government debt challenges.

The yield on 40-year Japanese government bonds reached 4.095% early Wednesday, slightly down from Tuesday’s all-time high of 4.22%.

Other Asian markets mostly tracked the downward trend. South Korea’s Kospi fell 0.5% to 4,862.17, while Hong Kong’s Hang Seng slipped 0.2% to 26,435.20. The Shanghai Composite index managed a modest 0.2% gain to 4,120.10, and Australia’s S&P/ASX 200 retreated 0.4% to 8,781.70. Taiwan’s Taiex dropped 0.9%, while India’s Sensex edged up 0.1%.

The selloff wasn’t limited to regional indices. On Wall Street, technology giants faced significant pressure, with Nvidia dropping 4.4% and Apple falling 3.5%. The weakness extended across sectors, hitting retailers like Lowe’s (down 3.3%), financial institutions including JPMorgan Chase (down 3.1%), and industrial firms such as Caterpillar (down 2.5%).

Market participants remain focused on upcoming central bank meetings, with the Federal Reserve expected to hold its benchmark interest rate steady at its policy gathering next week. The Bank of Japan will conclude its first monetary policy meeting of the year on Friday.

In commodity markets, gold’s surge to record territory reflected its traditional role as a safe-haven asset during periods of geopolitical uncertainty. Meanwhile, oil prices retreated, with U.S. benchmark crude falling 56 cents to $59.80 per barrel and Brent crude, the international standard, declining 70 cents to $64.22 per barrel.

Currency markets showed minimal movement, with the U.S. dollar trading at 158.08 Japanese yen, down slightly from 158.16 yen, while the euro held steady at $1.1719.

As global markets digest these developments, investors will closely monitor Trump’s Davos address for any signals regarding trade policy and international relations that could further influence market sentiment in the coming days.