CNBC Daily Open: Investors flee from the U.S. as Trump doubles down on Greenland

• Major U.S. indexes plunged with the S&P 500 down 2.56%, Dow down 1.76%, and Nasdaq down 2.39%, while the VIX 'fear gauge' spiked to 20.99
• Denmark's PFA pension fund announced it will reduce U.S. Treasury investments, citing concerns over poor government finances, marking an early signal of foreign capital flight
• Gold prices hit new records as investors fled to safe-haven assets, while the dollar weakened nearly 1% against major currencies and bond yields jumped

Market Summary: U.S. Sell-Off Intensifies on Greenland Tensions

Market Performance:

U.S. markets experienced their worst session since October on Tuesday, with the S&P 500 falling 1.76%, Dow Jones down 1.76%, and Nasdaq plunging 2.39%. Both the S&P 500 and Dow turned negative for 2026. The VIX "fear gauge" spiked to 20.99, signaling elevated volatility.

Key Driver:

Escalating geopolitical tensions around President Trump's aggressive push to annex Greenland triggered a classic risk-off market environment. Greenland's Prime Minister Jens-Frederik Nielsen warned the country must be prepared for "everything," though he noted military force remains unlikely.

Flight to Safety:

Investors fled U.S. assets, with bond yields rising and the dollar falling nearly 1% against major currencies. Gold prices surged to new records in what's tracking as the largest one-day gain since 2020. Silver also rallied to record highs.

Foreign Investor Response:

Denmark's ATP pension fund announced it will reduce U.S. Treasury holdings, citing concerns over government finances. Bridgewater founder Ray Dalio warned that tensions could escalate into "capital wars," with foreign governments reconsidering U.S. holdings.

Political Tensions:

French President Emmanuel Macron called for abolishing U.S. tariffs on Europe and suggested potential countermeasures. Treasury Secretary Scott Bessent defended the administration's stance, stating "America is ready to go."

Other News:

• UK inflation came in at 3.4% for December, above 3.3% expectations, potentially delaying BOE rate cuts
• Netflix posted narrow earnings beat and amended its Warner Bros. Discovery offer to all-cash
• Wall Street analysts suggest tensions may eventually cool despite tariff weaponization concerns