Stocks sell off globally as traders digest Trump message saying he wants Greenland because ‘your country decided not to give me the Nobel’

Stock markets went into a global sell-off this morning as world leaders in Davos awoke to news that US President Trump had written to Norway’s prime minister to say his repeated threats to take over Greenland were based on his failure to win the Nobel Peace Prize.

“Given that your Country has decided not to give me the Nobel Peace Prize … I no longer feel compelled to think only of Peace, although it will always be predominant, but now I can think of what is good and right for the United States of America,” said Trump’s message to Jonas Gahr Støre. “The world is not safe unless we have complete and total control over Greenland.”

The Norwegian government has no control over how the Nobel Committee awards its prizes. Greenland is a territory of Denmark, not Norway.

Last night, Trump again posted on social media: “NATO has been telling Denmark for 20 years that ‘you must remove the Russian threat from Greenland.’ Unfortunately, Denmark could not do anything about it. Now is the time and it will be done!!!”

Traders, dismayed by the prospect of a new trade war between the US and Europe, reacted by cutting stocks around the world.

S&P 500 futures fell 1.12% this morning – an unusually steep decline. The last session closed flat. (U.S. markets are closed for Martin Luther King Jr. Day) The STOXX Europe 600 was down 1.25 percent in early trading and Britain’s FTSE 100 was down 0.49 percent before midday. Japan’s Nikkei 225 fell 0.65 percent. China’s CSI 300 was flat. India’s NIFTY 50 was down 0.42%. Bitcoin fell to $93,000. The only major national index to have a good day was South Korea, where the KOSPI rose 1.32%.

Gold, the traditional safe-haven investment, hit a new record high of $4,673.4 on the Comex continuous contract.

Wall Street analysts generally agree that President Trump’s repeated threats to force Denmark to “give back” Greenland and impose an escalating set of trade tariffs on the UK and the EU if those countries do not comply are damaging for stocks globally. They differ only in their assessment of how bad it will get.

Carsten Brzeski and Bert Colijn of ING told clients: “Overall, we can only reiterate our previous estimates that additional 25% tariffs would likely reduce European GDP growth by 0.2 percentage points. However, this model-based estimate fails to capture the full impact of new uncertainty and geopolitical tensions as a result of escalating geopolitical tensions.”

They also warned: “As has happened before, it is unclear how this will work, as there has been no official communication from the White House, only Trump’s announcement on social media.”

The pair also warned that Trump may be underestimating how resilient Europe will be. “While Europe, at least initially, seems determined to oppose the US president’s latest tariff threat and claims over Greenland, the reality is that Europe is still dependent on the US in many ways, both economically and security-wise. This was probably one of the central reasons behind the EU’s agreement last summer to agree a trade deal with the US, which did not benefit the new customs situation in Greenland. It remains to see the tipping point that finally triggers European unity and the rise of Europe as a geopolitical power.

At UBS, Paul Donovan’s morning note warned that the new tariffs could backfire on US consumers. “The threatened US tariffs look more serious than those on Iran…they imply that consumer prices of EU and UK goods will rise by 4% to 10% (in about six months). This could reinforce the US affordability crisis narrative.”

“Policy uncertainty is back for U.S. business. This has curbed investment and hiring, but may have faded as firms adjust. Uncertainty on this scale may once again put U.S. corporate activity on hold.”

There is also the question of whether Trump has enough domestic political capital to support his desire to conquer Greenland.

“A Reuters/Ipsos poll last week suggested that only 17% of US citizens supported efforts to acquire Greenland, with 47% opposed. Only 4% approved of the use of military force, with only 8% of Republican voters agreeing,” Jim Reid and his team at Deutsche Bank told clients this morning.

Here’s a snapshot of the markets before the opening bell in New York this morning:

• S&P 500 futures were down 1.12% this morning. The last session closed flat. US markets are closed for MLK Day.

• STOXX Europe 600 was down 1.25% in early trading.

• UK’s FTSE 100 was down 0.49% in early trade.

• Japan’s Nikkei 225 decreased by 0.65%.

• CSI 300 from China it was flat.

• South Korea KOSPI increased by 1.32%.

• NIFTY 50 of India decreased by 0.42%.

• Bitcoin dropped to $93,000.

This story was originally featured on Fortune.com