President Trump's Greenland demands have already had a negative impact on the economy in the U.S. On Tuesday, all three major U.S. stock indexes dropped over the threat of new tariffs. CBS News business analyst Jill Schlesinger explains what to know.

Washington

U.S. stock markets experienced significant declines, with the Dow, Nasdaq, and S&P 500 each falling by about 2% after President Trump threatened new tariffs on European imports. The market reaction was attributed to increased uncertainty and fears of a fracturing global order, prompting investors to sell stocks and bonds, pushing up interest rates and driving gold to a record high.

Analysts noted that if the proposed 10% tariffs are implemented, Europe would likely be more affected, while U.S. consumers could see higher inflation and potentially rising mortgage rates. Financial experts advised investors to remain calm and avoid making reactive decisions, referencing past market recoveries after similar downturns.

U.S. stocks sink amid Trump's new tariff threats

As we mentioned, the president's push to seize Greenland is now hitting stocks and your 401ks. On Tuesday, the Dow, Nasdaq, and the S&P 500 dropped by around 2% over the threat of a trade war with Europe. CBS News business analyst Jill Schlesinger is here with more. Jill, good to see you. Good morning. All right. So this was the worst trading day for all three averages since October. What happened? Well, I think investors are really taken aback once again by the uncertainty unleashed over the weekend. This is really slightly different than what we saw during Liberation Day because there is a sense that the global world order that relies on rules is being broken. And we heard Mark Carney, who is the prime minister of Canada, come out at Davos saying, hey, we middle powers have to come together. I thought the quote that he said was pretty interesting. Middle powers must act together because if we are not at the table, we are on the menu. And I think investors are really freaked out by this, that there could be some fracturing in the world order. This causes them to sell stocks. They sold bonds, which pushes interest rates up. They sold the U.S. dollar and they fled to safety in gold, which reached a new record high yesterday. And if the president falls through with the threat of the 10% tariffs, and normally he follows through on his threats, what do you think would be the impact on the economy and for the consumer? Well, I think for the economy, it's Europe that will suffer more. I think in the U.S., from the consumer perspective, we might take a little bit of a hit to growth, but it's about inflation. We might continue to see inflation remain at this 3%, maybe 3.2% level. That's much higher than the Fed wants. I think the other part for consumers that's very important here, you heard me mention that bonds sold off and treasury yields went up. What does that mean? That means mortgage rates could start to rise, exactly what the president has been arguing against. And this is about supply and demand in the marketplace, not any sort of mantra that is being directed at the Fed. Not mortgage rates. I mean, we're hoping for them to come down, Jill, I mean, I got to move. But what should people do in terms of guidance? Should they look to last year and how the market's reacted? I think last year is instructive about not being reactive. Last year, we came in with the stock market very strong. We fell tremendously in April, downed a lot. We were at a low of 19% off recent highs. From the April lows to the end of the year, the S&P 500 was up more than 37%, finishing the year at over a 16.6% return. Do not react. Tune out the noise. Stay the course. I'm sorry. You always say this. But it worked last year. But it's hard not to freak out when you hear this kind of. OK, so freak out, but don't do anything. OK. All right. Jill Schlesinger, thank you so much.

President Trump spoke at the World Economic Forum in Switzerland, addressing European allies as tensions rise over his Greenland demands. Mr. Trump demanded immediate negotiations to acquire the territory and claimed he wouldn't use force. Ed O'Keefe reports.

Davos

Trump vows he 'won't use force' to acquire Greenland

Speaking at the World Economic Forum in Davos on Wednesday, the US president described the self-governing Danish territory as a “piece of ice” that is “part of North America.”

Trump vows not to use force to acquire Greenland

Steve Witkoff says he and Jared Kushner will holds talks with Vladimir Putin in Moscow on Thursday.

Moscow

U.S. special envoy to discuss peace in Ukraine with Russian president

Brooklyn Beckham, the oldest son of David and Victoria Beckham, accused his parents in a social media statement of trying to undermine his marriage and of valuing "public promotion" over family. David Beckham acknowledged the allegations and responded, saying, "they make mistakes. Children are allowed to make mistakes." Adriana Diaz has more.

David Beckham responds as son accuses parents of prioritising image

Authorities dismantled 24 industrial-scale labs and seized around 1,000 tonnes of chemicals used to make street drugs such as MDMA, amphetamine and meth.

Brussels

Europe police seize 1,000 tonnes of chemicals in record drugs bust

Stocks plunged on the first day of trading after President Trump threatened tariffs against European nations that oppose his bid to acquire Greenland. Lauren Hirsch, a New York Times reporter, joins CBS News with more.

Stocks plunge as global concerns about Trump tariffs over Greenland grows

Prince Harry is testifying in London in a case against a British tabloid for news coverage he says went too far. Elton John, Elizabeth Hurley and several other high-profile people have joined the prince in his civil suit for violations of privacy.

London

Prince Harry testifies in latest lawsuit against British tabloid

Israel's Prime Minister Benjamin Netanyahu says he will join US President Trump's so-called 'board of peace' for Gaza.

Jerusalem

Israeli PM Benjamin Netanyahu joins Trump’s ‘board of peace’ for Gaza

South Korea's Prime Minister Han Duck-soo was indicted for failing to prevent and abetting Yoon's martial law declaration.

Seoul

Ex-South Korean PM Han Duck-soo found guilty of action of insurrection

The man who admitted to killing Japan's former Prime Minister Shinzo Abe in 2022 is sentenced to life in prison.

Tokyo

Man who killed Japan's former PM sentenced to life in prison

Bobi Wine, who is currently in hiding, has alleged widespread fraud during the vote that saw incumbent President Yoweri Museveni win a seventh term in office.

Kampala

Uganda's military chief gives opposition leader 48 hours to surrender

A Barcelona commuter train crashed after a retaining wall fell onto the tracks, killing at least one person and injuring 37 others. The crash in Catalonia came just two days after a separate deadly train collision killed at least 42 people in the country's south and injured dozens more.

Barcelona

One killed in Barcelona train crash, days after Adamuz collision

Since the October 7, 2023, Hamas attack, Israel has sought to ban UNRWA over alleged ties to Hamas, claims the UN denies. DW visited the site as Israeli forces bulldozed the UN agency's compound in occupied East Jerusalem.

Middle East Conflict

Israel demolishes UNRWA headquarters in Jerusalem

Global stocks fell after U.S. President Donald Trump made new threats to take Greenland by force during a long press conference. Asked how far he’d go, Trump replied, ‘You’ll find out.’ The threats came just hours after he shared an AI-generated image of both Canada and Greenland covered in the U.S. flag.

Greenland Stand-Off

Markets plunge, allies rattled after Trump's new Greenland threats

The Syrian government has announced a four-day ceasefire with the Kurdish-led Syrian Democratic Forces, following renewed fighting in the north. The SDF says it will abide by the truce. The government says the ceasefire will give time for the SDF to find ways to integrate the northeastern province of Hasakah.

Damascus

Four day ceasefire announced in Syria, Hasakah future to be discussed

French President Emmanuel Macron on Tuesday said the European Union should not bend to 'the law of the strongest.' He told the World Economic Forum in Davos, Switzerland, that it was staggering that the EU was having to contemplate using its 'anti-coercion instrument' against the U.S. (Macron is wearing dark glasses because of an eye condition.)

Paris

France's Macron says EU shouldn't bend to 'law of the strongest'

France's Emmanuel Macron and U.S. President Donald Trump have long exchanged firm handshakes, but their relationship is showing cracks. In a striking break from diplomatic norms, Trump publicly shared what he called a private message from Macron – proposing a G7 meeting in Paris and discussing Syria, Iran, and Greenland.

Trump publishes Macron's message, threatens French wine tariffs

The death toll from Sunday's high-speed train collision in Spain has risen to 41 as recovery crews use cranes to lift up the train cars and look for victims underneath. Chris Livesay reports on the search for a cause of the crash.

Adamuz

Investigators search for cause of deadly Spain train crash

Valentino, the renowned Italian fashion designer who proudly boasted he "knows what women want" has died in Rome. His sumptuous creations saw him crowned the king of the red carpet for major celebrities needing to be dressed to impress.

Rome

Valentino, 'The Last Emperor' of Italian fashion dies aged 93

The "Board of Peace" was an idea initially proposed by Trump last September as part of his plan to end the war in Gaza, although the initiative now seems to be aimed at mediating global conflicts more broadly.

Global Tariffs

Trump threatens 200% tariffs on French wine over ‘Board of Peace’

People who joined antigovernment protests in Iran are given a three-day deadline to turn themselves in and face a more lenient sentence.

Tehran

Iran police give protesters three days to surrender for leniency

Some 3,000 federal agents are still in the Twin Cities area as President Trump is threatening to invoke the Insurrection Act over continued protests against immigration operations there. Ian Lee reports.

Minnesota

ICE operations, protests continue in Twin Cities as Trump threatens

President Trump continued his push for the U.S. to take over Greenland, telling the prime minister of Norway his perceived snub for the Nobel Peace Prize meant he no longer feels obligated to "think only of peace." The prize is awarded by the private Nobel Institute, not the Norwegian government. Ed O'Keefe has more, and then Holly Williams joins with analysis.

Trump ties Greenland threat to perceived Nobel Peace Prize snub

Valentino Garavani, founder and namesake of the luxury fashion empire Valentino, has died at 93. Garavani was known for a trademarked shade of red, a staple at his fashion shows for nearly half a century.

Iconic fashion designer Valentino Garavani dead at 93

Experts studying the cause of the derailment of a high-speed train in Spain - which killed dozens of people - found a broken joint on the rails, according to a source with knowledge of the investigation.

Investigators find broken joint on track at Spanish rail crash site

Prince Harry is back in a London court, along with a slew of other high-profile figures, fighting the publisher of the Daily Mail over invasion of privacy and illegal information gathering tactics.

Prince Harry back in London court fighting British tabloids

U.S. President Donald Trump has told Norway's prime minister in a letter that he no longer feels obligated "to think purely of Peace" because he had not been awarded the Nobel Peace Prize, and he repeated his demand for control of Greenland.

Trump tells Norway he no longer feels obligated to think only of peace

Billionaire wealth surged at three times ‍its recent pace ​last year to reach its highest level on record, deepening economic and political divides that threaten democratic ⁠stability, anti-poverty group Oxfam said.

World billionaire wealth hits new peak amid rising poverty, Oxfam says

A high-speed train collision that caused a derailment in southern Spain has killed at least 39 people, officials say. Investigators are working to determine the cause of the crash.

Breakdown