US stocks suffered a sharp selloff on Tuesday, with the Dow Jones Industrial Average plunging 870 points and the S&P 500 posting its largest daily decline since October. Market sentiment deteriorated rapidly after US President Donald Trump reiterated hardline rhetoric on Greenland and threatened higher tariffs on eight European countries.
Risk aversion dominated trading as investors rotated out of US assets. Treasury yields surged, US equities fell broadly, and reports surfaced that Danish pension funds are exiting the US Treasury market, adding to pressure on bonds and the dollar.
Selling was widespread across Wall Street, led by technology stocks, which are seen as particularly vulnerable in a rising-yield, slowing-growth environment. NVIDIA fell 4.4%, while Tesla dropped 4.2%. The CBOE Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” jumped to 20.69, its highest level since November 25 last year.
As tensions between the US and Europe escalated over the Greenland issue, Trump threatened to raise tariffs on multiple European countries. Capital flowed out of US assets, pushing US Treasuries and the US dollar lower, while Treasury yields spiked. Gold prices surged to fresh record highs, reflecting the sharp rise in safe-haven demand.
Over the weekend, Trump posted on Truth Social that exports from eight NATO member countries to the US would face escalating tariffs “until a full and complete agreement to purchase Greenland is reached.” According to Trump, tariffs will begin at 10% on February 1 and rise to 25% by June 1.
Subsequently, reports indicated that French President Emmanuel Macron declined to join Trump’s proposed “Board of Peace.” In response, Trump threatened to impose 200% tariffs on French wine and champagne, further unsettling markets.
US Stocks Highlights
D Prime US Stocks Watch:
Major tech stocks declined across the board. NVIDIA fell 4.38%, Apple dropped 3.46%, Microsoft lost 1.16%, Alphabet fell 2.42%, Amazon slid 3.40%, Meta declined 2.60%, Tesla dropped 4.17%, Broadcom fell 5.43%, Oracle lost 5.85%, Netflix dipped 0.84%, while Intel rose 3.41%.
Chinese ADRs also mostly weakened. The Nasdaq Golden Dragon China Index fell 1.45%. Alibaba dropped 1.82%, JD.com fell 1.80%, Pinduoduo declined 2.15%, NIO lost 3.18%, XPeng fell 3.15%, Li Auto dropped 2.84%, Bilibili plunged 6.80%. Baidu edged up 0.33%, while NetEase fell 0.59%, Tencent Music dropped 2.23%, and Pony.ai slid 6.20%.
D Prime US Market Snapshot
- Dow Jones: -870.74 points (-1.76%) to 48,488.59
- Nasdaq: -561.07 points (-2.39%) to 22,954.32
- S&P 500: -143.09 points (-2.06%) to 6,796.92
Hong Kong Market
Hong Kong stocks traded mixed by midday. Tech stocks were mixed, with NetEase and Lenovo down over 3%, Xiaomi down over 2%, while Baidu rose more than 3% and Alibaba gained over 1%.
Semiconductor stocks outperformed, with Hua Hong Semiconductor up over 4%. Gold stocks rallied broadly, with Lingbao Gold surging more than 7%. Property stocks weakened, led by Sunac China down over 3%, while new consumption names pulled back, with Shanghai Auntie down over 6%.
D Prime Insight:
Semiconductor strength followed comments from Micron, which warned that slow fab expansion and lengthy customer certification processes mean memory shortages are unlikely to ease before 2028. Morgan Stanley noted that strong demand for DDR4 could drive price increases of up to 50% in Q1, with momentum extending into Q2, while capacity shifts have also caused severe shortages in high-density DDR3, benefiting suppliers.
Gold stocks surged as geopolitical tensions intensified. Spot silver briefly jumped to $95.89/oz, setting another record, while spot gold broke above $4,830/oz intraday, also marking a new all-time high.
D Prime Hong Kong Market Snapshot
- Hang Seng Index: -0.15% to 26,449.10
- Hang Seng Tech Index: +0.14% to 5,691.65
- China Enterprises Index: -0.26% to 9,071.33
A50 >>
Mainland China equities advanced in morning trade. By midday, the Shanghai Composite rose 0.16%, Shenzhen Component gained 0.76%, ChiNext climbed 0.85%, Beijing Stock Exchange 50 rose 0.65%, and the STAR 50 Index jumped 2.96%. Total turnover reached RMB 1.65 trillion, down from the previous session, with over 2,900 stocks advancing.
D Prime Insight:
Sector gains were led by gold, non-ferrous metals, CPO, semiconductors, robotics, lithium extraction, and 6G concepts, while liquor, coal, retail, tourism, airports, power, and grid equipment stocks lagged.
D Prime A-Share Market Snapshot
- Shanghai Composite: +0.16% to 4,120.10
- Shenzhen Component: +0.76% to 14,263.20
- ChiNext: +0.85% to 3,306.00
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