A key gauge of stock market volatility rose above the 20 level for the first time since November, as U.S. stock futures sank with traders assessed the impact of U.S. tariff threats over Greenland.
Keep tabs onthe VIX with InvestingPro The CBOE Volatility Index, known as the VIX, surged by 29% to 20.46 at 04:47 ET (09:47 GMT), ticking higher for a second consecutive day. Both the VIX and Wall Street futures were open on Monday, while cash equities trading was closed in the U.S. for a holiday.
Last year, similar spikes in the VIX were short-lived as Trump dialled back many of his more aggressive trade positions. But, following a sharp rebound in U.S. stocks throughout 2025 that has extended into a climb to record highs this year, the magnitude of any possible market ructions is in focus.
Tuesday’s jump in the VIX comes as jittery investors attempt to suss out the likelihood that President Donald Trump will slap 10% tariffs on several European countries unless the U.S. is granted ownership of Greenland, a semi-autonomous Danish territory.
“[M]arkets are getting hit very hard,” analysts at Vital Knowledge said in a note, adding that Trump’s threats amount to a fresh outbreak in a trade war which “many assumed had largely ended after the White House struck a series of trade deals last year.”
Trump has claimed that he will hold talks on Greenland during a visit to the World Economic Forum’s annual meeting in Davos, Switzerland this week, although it was unclear who he would speak with.
On social media, the president said he had held “good” talks with Mark Rutte, the Secretary General of the North Atlantic Treaty Organization. Uncertainty has swirled around whether the longstanding alliance can withstand the crisis, especially amid the prospect of potential U.S. military intervention in a region run by a NATO ally.
European leaders have described Trump’s latest tariff salvo as a form of blackmail, and are reportedly mulling over their own responses. These could include a massive 93-billion euro package of retaliatory tariffs on U.S. goods or even the implementation of an instrument designed to deter economic coercion, media reports say.
The second option, in particular, may restrain U.S. access to the European economy, collectively the world’s third largest.
