S&P futures advanced on Wednesday morning, indicating a cautious rebound following market’s most challenging day in three months. Futures associated with the Dow Jones Industrial Average increased by 116 points, representing a 0.2% rise. S&P 500 futures increased by approximately 0.4%, while Nasdaq 100 futures also rose by 0.4%. U.S. equities experienced significant declines during Tuesday’s trading session as President Donald Trump intensified his tariff threats regarding Greenland, just prior to his anticipated address at the World Economic Forum in Davos, Switzerland, on Wednesday. The 30-stock Dow experienced a decline of over 870 points, translating to approximately 1.8%, whereas the S&P 500 saw a decrease of around 2.1%. A decline in technology stocks prompted the selloff, resulting in a 2.4% decrease in the Nasdaq Composite for the day.

All three benchmark indices recorded their most significant daily declines since October 10. The selloff also pulled the S&P 500 and the Nasdaq into negative territory for 2026. The recent trend of selling American assets on Tuesday coincided with a notable increase in U.S. Treasury yields and a depreciation of the U.S. dollar. The 10-year Treasury yield experienced a significant increase, momentarily exceeding 4.3% at its peak for the day. On Tuesday, Trump refrained from specifying the extent of his ambitions regarding the acquisition of Greenland, responding to a reporter with, “You’ll find out.” Trump has not dismissed the possibility of military intervention to acquire the island and has recently issued threats of imposing tariffs as high as 25% on eight NATO members should they obstruct his acquisition efforts.

During her address in Davos on Tuesday, European Commission President Ursula Von der Leyen characterized Trump’s new tariff proposals as a “mistake” that could lead both Europe and the U.S. into “a dangerous downward spiral.” “Our response will be unflinching, united and proportional,” she stated, emphasizing that the EU stood in “full solidarity” with Greenland and Denmark. Bernd Lange, the chair of the European Parliament’s international trade committee, is scheduled to conduct a press conference in Strasbourg, France, later on Wednesday. Sources indicated that he is set to announce a suspension of the U.S.-Europe trade agreement concluded during the summer months. During his address at the WEF on Tuesday, French President Emmanuel Macron articulated that a possible reaction to the newly imposed U.S. tariffs could involve the utilization of the EU’s Anti-Coercion Instrument.

Activating the ACI may lead to the exclusion of American suppliers from EU public tenders, impose export and import restrictions on goods and services, and restrict foreign direct investment. Akademiker Pension announced on Tuesday its decision to divest from its approximately $100 million investment in U.S. Treasurys, citing financial concerns regarding U.S. debt. The action was taken amid rising tensions between the United States and Denmark concerning Greenland. “It’s not a major pullback yet, and so we do think there’s a possibility and a very realistic possibility for things to go perhaps a more negative turn before they get better,” stated Yung-Yu Ma. On Wednesday morning, Treasury Secretary Scott Bessent informed reporters in Davos that the Trump administration was “not concerned” about the sell-off. This week presents a significant opportunity for corporate earnings, with Netflix slipping after hours, while Johnson & Johnson, Halliburton, and Travelers are scheduled to report on Wednesday.