The FTSE 100 (^FTSE) and European stocks fell at the opening bell on Tuesday, as traders digest the latest developments in president Donald Trump’s bid to control Greenland.

Trump wrote on social media that the UK’s move to hand over the Chagos Islands to Mauritius was an “act of great stupidity” and that it had made the US’s acquisition of Greenland imperative.

“There is no doubt that China and Russia have noticed this act of total weakness. These are International Powers who only recognize STRENGTH, which is why the United States of America, under my leadership, is now, after only one year, respected like never before,” he wrote.

Britain’s Chagos agreement, signed in May last year, was conditional on retaining control of a strategic UK-US military base on Diego Garcia. The Trump administration had previously given public support for the deal.

Meanwhile EU leaders continue to try to reason with Trump, who published a text message he received from french president Emmanuel Macron and floated a 200% tariff on champagne.

“I do not understand what you are doing on Greenland,” Macron wrote. He also proposing a G7 meeting – after the World Economic Forum in Davos – with Danish, Ukrainian and Russian representatives attending on the margins.

Macron has reportedly declined a position on Trump’s Board of Peace.

Trump has also threatened to impose new tariffs 10% tariffs on a set list of European nations, beginning on 1 February and applying to “any and all goods sent to” the US.

The levies on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland would be raised to 25% on 1 June if no agreement is in place.

Gold, an asset investors tend to flock to as a haven in times of risk, rose to new all-time highs, with futures prices (GC=F) up 3% as markets opened in Europe.

The FTSE 100 fell 0.8% after the opening bell. Luxury retailer Burberry (BRBY.L) was the top faller in the index in early trade, down more than 2.8%. Luxury stocks are sensitive to tariff policy.

The DAX (^GDAXI) in Germany dipped 0.8% ahead of the latest ZEW economic survey reading.

The CAC 40 (^FCHI) in Paris declined 0.7%.

The pan-European STOXX 600 (^STOXX) sold off 0.7%.

The pound rose 0.4% against the dollar (GBPUSD=X) to just below the $1.35 mark.

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UK unemployment remains near five-year high and wage growth slows

Vicky McKeever writes:

UK unemployment remains at nearly a five-year high, while wage growth has continued to slow, according to the latest data from the Office for National Statistics (ONS).

The rate of UK unemployment was stood at 5.1% in September to November, which was unchanged from the previous three months.

Annual growth in average earnings, excluding bonuses, was 4.5% in September to November, which was down from 4.6% for the previous three months.

The estimated number of payrolled employees in the UK fell by 155,000 in the year to November and declined by 33,000 on the month.

An early estimate for payrolled employees in December showed a 184,000 fall on the year and a 43,000 decline month-on-month.

Meanwhile, early estimates for the number of job vacancies in the UK suggested a small increase of 10,000 for October to December.

Read more on Yahoo Finance UK

Here’s the US stock futures chart
US stock futures lower after holiday break

From our US team:

US stock futures slid Tuesday morning, signaling a rocky return to trading as President Trump escalated trade tensions with Europe over Greenland, reviving tariff fears just as Wall Street heads into earnings season.

Dow Jones Industrial Average futures (YM=F) fell 1.1%, pointing to a drop of around 550 points at Tuesday’s open. S&P 500 futures (ES=F) slipped 1.2%, while Nasdaq 100 futures (NQ=F) sank just over 1.4%.

The moves followed Trump’s weekend announcement that the US will impose sweeping tariffs on imports from eight NATO countries unless they agree to negotiations over the “complete and total purchase of Greenland.” In response, Europe has discussed up to $108bn in retaliatory tariffs, with a potential fallout of some $8 trillion.

In a Truth Social post on Saturday, Trump said US tariffs against the EU would begin at 10% on Feb. 1 and climb to 25% by June 1. European officials quickly condemned the threat as “unacceptable.” Adding to the intrigue this week, Trump will speak at the World Economic Forum in Davos, Switzerland, on Wednesday.

Good morning!

Hi from London. Another day — another geopolitical drama.

On the slate:

The World Economic Forum in session from Davos (all week)

UK jobs data (already published — more to come on the blog)

Germany’s ZEW economic sentiment indicator

In terms of earnings and company updates, expect some noise from:

UK: Watkin Jones (WJG.L), Kromek (KMK.L), Rio Tinto (RIO.L), Cranswick (CWK.L) Interactive Brokers (IBKR), DFS Furniture (DFS.L)

US: Netflix (NFLX), US Bancorp (1USB.MI), DR Horton (DHI), 3M (MMM), United Airlines (UAL)

Let’s get to it.