US stocks open deep in the red: Nasdaq slips around 2%, S&P down 1.4%

• Trump announced escalating tariffs starting at 10% on Feb. 1 and rising to 25% by June 1 on eight NATO countries, plus threatened 200% tariffs on French wines and champagne
• The Dow dropped 618 points (1.2%), with tech stocks like Nvidia, AMD, and Alphabet falling over 2%, while the VIX 'fear gauge' jumped above 19 to its highest level since November
• European leaders are considering deploying the EU's Anti-Coercion Instrument as retaliation, with France pushing for the strongest economic countermeasures as Trump prepares to meet European leaders at Davos on Wednesday

Market Summary: US Stocks Plunge on Trump Tariff Threats

Key Market Movements

US equities opened sharply lower on Tuesday, January 20, 2026, with the Nasdaq Composite falling approximately 2%, the S&P 500 declining 1.4%, and the Dow Jones Industrial Average dropping 618 points (1.2%). The Cboe Volatility Index surged above 19, reaching its highest level since November.

Catalyst for Sell-Off

President Donald Trump triggered the market rout by threatening sweeping tariffs linked to his demand for Greenland's purchase. Specific measures include:

• 10% tariffs on imports from eight NATO countries starting February 1, escalating to 25% by June 1
• 200% tariffs threatened on French wines and champagne
• Criticism of UK's Chagos Islands sovereignty transfer

Sector Impact

Technology stocks led losses, with Nvidia, AMD, and Alphabet each declining over 2%. The sell-off was broad-based across sectors, with few stocks trading higher.

Market Implications

The tariff threats sparked a risk-off environment, driving Treasury yields higher and weakening the US dollar as investors fled US assets. European leaders called the measures "unacceptable," with France reportedly pushing for EU countermeasures using the Anti-Coercion Instrument.

Upcoming Catalysts

Critical earnings reports expected this week from Netflix, Charles Schwab, Johnson & Johnson, and Intel will test market resilience. Analysts project S&P 500 earnings growth of 12-15%, but elevated valuations leave markets vulnerable to geopolitical disruptions. Trump's scheduled appearance at the World Economic Forum in Davos on Wednesday adds further uncertainty.

The sharp reversal highlights heightened sensitivity to political risk amid an already stretched equity market.