Topline
The Cboe Volatility Index, often referred to as Wall Street’s “fear gauge,” surged Tuesday and approached a three-month high, as President Donald Trump escalated his tariff threats against European countries amid his bid to take control of Greenland.
Trump said he would impose tariffs on European countries that deployed military personnel to Greenland.
Copyright 2026 The Associated Press. All rights reserved.
Key Facts
The Cboe Volatility Index, or VIX, increased nearly 28% over the last day to around 20.30 as of Tuesday morning, the highest point for the index since November.
The VIX tracks implied stock movements over the next 30 days on the S&P 500: When implied volatility is high, the VIX is high and the expected value of stocks is broad, and when implied volatility is low, the VIX is low and the projected stock range is narrow.
VIX and the S&P 500 tend to move in opposite directions, and the index lost 107 points (1.5%) to around 6,869 shortly after trading opened Tuesday, despite nearing the 7,000-point milestone in recent sessions.
Deutsche Bank analyst Jim Reid wrote in a note Tuesday that “markets have reacted” to Trump’s tariff threats and pushed a more aggressive stance on the U.S. controlling Greenland, adding there’s “clearly room for bigger moves if the rhetoric increases further.”
There are “growing fears” of retaliatory trade moves from Europe, Reid said, as more European officials oppose Trump’s decision to impose 10% tariffs—which he said would increase to 25% by June—on eight NATO members that deployed military personnel to Greenland.
How Have Markets Reacted To Trump’s Latest Tariffs?
The Dow Jones Industrial Average shed 737 points (1.4%) to 48,648, with losses headlined by 3M (down 5.5%), Amazon (2.8%), and Amgen (2.4%). Nvidia dropped 2.3%, leading declines across the S&P and the tech-heavy Nasdaq, which fell 1.4%, with losses from Shopify (3.2%), Broadcom (2.6%) and Tesla (2.4%). The European STOXX Europe 50 dropped 1.3% amid Trump’s threats, while the London Stock Exchange’s benchmark FTSE 100 index declined 1%, Germany’s DAX fell 1.4% and France’s CAC 40 decreased 1.1%.
Key Background
Trump’s threats for U.S. control over Greenland have accelerated in recent weeks, including his latest move to impose tariffs on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland. Those levies will take effect Feb. 1 before rising to 25% on June 1, Trump said. Trump has said that China and Russia have sought control of Greenland and argued there is “not a thing that Denmark can do about it,” adding it was “time for Denmark to give back.” European officials have broadly criticized Trump’s push for Greenland, including Danish Prime Minister Mette Frederiksen, who warned that NATO would cease to exist if the U.S. were to attack Greenland, “and therefore post-second world war security.”
Further Reading
Source: https://www.forbes.com/sites/tylerroush/2026/01/20/wall-streets-fear-gauge-spikes-to-highest-level-since-november-as-trump-escalates-greenland-threats/
