Key Points

• U.S. Markets Jolt on Greenland Tariff Escalation: Wall Street suffered its sharpest daily decline since October as President Trump’s renewed tariff threats tied to Greenland triggered a broad risk-off move, pushing equities lower, Treasury yields higher, and the dollar weaker.
• Asia Slides as Gold Hits Record Highs: Asian markets retreated as geopolitical tensions spilled over from the U.S., driving investors toward safe havens and lifting gold to fresh all-time highs amid fears of an expanding transatlantic trade conflict.
• European Capital Pullback Signals Confidence Erosion: Denmark’s AkademikerPension announced plans to sell roughly $100 million in U.S. Treasurys, citing concerns over U.S. fiscal sustainability, underscoring how geopolitical strain is beginning to influence global capital allocation decisions.
• Reliance Industries Faces Domestic Growth Test: While geopolitical pressures and sanctions complicate energy operations, slowing momentum in Reliance Retail has emerged as the dominant concern for investors, prompting brokerages to trim forecasts despite resilience in refining and telecom.

January Economic Calendar

Wall Street Slides as Tariff Rhetoric Rattles Risk Appetite

U.S. equities suffered their sharpest selloff since October after renewed tariff threats tied to Greenland heightened political and market uncertainty. The Dow Jones Industrial Average fell nearly 1.8%, while the S&P 500 dropped 2.1% and the Nasdaq Composite slid 2.4%, pushing major benchmarks into negative territory for 2026.

The move was accompanied by rising Treasury yields and a weaker dollar, signaling a broader “sell America” response. President Donald Trump escalated tariff threats against European allies ahead of Davos, unsettling global markets. With earnings season intensifying, results from companies such as Netflix and Johnson & Johnson are now in focus as investors look for corporate fundamentals to stabilize sentiment.

Gold Surges as Asia Markets Slide on Tariff Escalation

Asia-Pacific markets weakened as President Donald Trump’s renewed tariff threats tied to Greenland triggered a flight to safety, lifting gold to a record above $4,800 an ounce. Japan’s Nikkei 225 and South Korea’s Kospi led regional declines, while Hong Kong and mainland China were mixed.

The risk-off mood followed Wall Street’s sharpest selloff since October, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all posting steep losses. Rising U.S. Treasury yields and a weaker dollar underscored concerns that escalating trade tensions could spill over into global growth and asset valuations.

Danish Pension Fund Exits U.S. Treasurys Amid Fiscal and Geopolitical Strains

Denmark’s AkademikerPension said it will sell its roughly $100 million holding in U.S. Treasurys by month-end, citing concerns over America’s deteriorating public finances and rising geopolitical risk. The move follows a widening budget deficit, heavy debt-servicing costs and Moody’s Ratings’ downgrade of U.S. sovereign credit last year.

Tensions between Washington and Copenhagen have intensified as Donald Trump presses for control of Greenland and threatens tariffs on European allies. The decision adds to signs of a broader “sell America” trade, echoed by comments from Ray Dalio, who warned that sustained trade and political conflicts could prompt global investors to reassess U.S. assets and Treasurys as safe havens.

Reliance Industries Faces Domestic Growth Test

India’s largest conglomerate, Reliance Industries, is facing rising investor scrutiny as a slowdown in its retail arm weighs more heavily on valuation than geopolitical challenges in energy. Reliance Retail posted modest quarterly growth, prompting brokerages including Macquarie Capital, Citi and UBS to cut earnings forecasts and target prices, despite maintaining buy ratings.

While the group has reduced imports of discounted Russian crude following U.S. sanctions on Rosneft and Lukoil, its refining margins have held up and telecom continues to deliver steady growth. With domestic consumption soft and retail momentum slowing, investors increasingly see execution at home—rather than geopolitics abroad—as the key risk shaping Reliance’s near-term outlook.

Conclusion

Global markets are navigating a sharp rise in geopolitical risk, with tariff threats linked to Greenland unsettling investor confidence and triggering broad-based volatility across equities, currencies and bonds. The shift toward safe havens, including record-high gold prices, reflects growing unease over policy unpredictability and its spillover into capital flows.

At the same time, signs of selective capital reallocation away from U.S. assets highlight sensitivity to fiscal and political credibility. In Asia, company-specific fundamentals remain critical, as illustrated by Reliance Industries, where domestic demand trends now outweigh external pressures. Overall, markets are entering a more fragile phase where geopolitics and fundamentals are increasingly intertwined.

Investment Insights

• Elevated policy risk favors selectivity: Escalating tariff threats tied to Greenland reinforce the need to manage geopolitical risk premiums, particularly across European exporters, global cyclicals and trade-sensitive equities.
• Safe-haven demand is rising: The move into gold and away from U.S. assets highlights growing investor sensitivity to fiscal discipline and policy credibility, supporting defensive allocations amid elevated volatility.
• Sovereign risk is back in focus: The Danish pension fund’s exit from U.S. Treasurys underscores rising scrutiny of U.S. debt sustainability, with implications for yields, the dollar and global capital flows.
• Emerging market fundamentals diverge: Reliance Industries’ retail slowdown shows domestic demand dynamics matter more than geopolitics, reinforcing the need for selective, fundamentals-driven exposure in India.