S&P 500 Futures Slip as Sell-America, Japan Jitters Spread

S&P 500 futures point lower as US markets reopen amid renewed “sell America” sentiment following tariff threats tied to Greenland tensions. Treasuries weakened in Asia while the dollar stayed soft, with the yen lagging near 158 despite broad dollar selling. Japanese government bond yields jumped after weak demand at a 20-year auction, reflecting investor unease over election-driven fiscal risks. European equities faced pressure after a major bank downgraded the region on earnings uncertainty.

Equities

The FTSE 100 closed lower late on Monday, ending the session down 0.4% as tariff threats from the White House weighed on sentiment across London’s market. The more domestically focused FTSE 250 fell 0.9% by the close, marking its sharpest daily fall since late November. Shares in carmakers and parts suppliers led declines, while luxury stocks also came under pressure as investors assessed the implications for trade between Britain, Europe and the United States.

Among individual UK stocks, Beazley surged to a record high late on Monday, rising more than 40% after Zurich Insurance Group raised its takeover offer to 1,280 pence per share. The move lifted other insurers, with Hiscox rising just over 9% and Lancashire adding around 4%. WH Smith climbed 11% by the close after announcing a leadership change, appointing former Balfour Beatty chief Leo Quinn as executive chair, a move aimed at stabilising the business and improving execution across its travel-focused estate. In contrast, Burberry and Watches of Switzerland closed sharply lower, down close to 3% and just over 2% respectively, as luxury stocks tracked broader European weakness.

In Europe, the STOXX 600 finished the day down around 1.2%, while Germany’s DAX, France’s CAC 40 and London’s FTSE 100 all ended in the red. Asian markets also slipped earlier in the day, with Japan’s Nikkei closing lower after Prime Minister Sanae Takaichi confirmed plans for a snap general election in February.

In the United States, cash equity markets were shut for the Martin Luther King Jr. Day holiday, but futures pointed clearly lower. S&P 500 and Nasdaq 100 futures were both down more than 1% late on Monday following renewed tariff threats from Donald Trump, including proposed levies on imports from Britain and several European countries if no agreement is reached over Greenland. US bond futures also softened, with 30-year Treasury futures falling during the session.

Forex & Commodities

The US dollar weakened again, extending losses seen late on Monday as investors reduced exposure to US assets following renewed tariff threats from Donald Trump linked to Greenland. In Asian trading, the dollar index slipped to 98.84, its lowest level in just over a week. Against sterling, the pound edged higher to $1.344 during the morning, while the euro rose to $1.166. The dollar was firmer against the yen at 158.5 after Japanese government bond markets sold off overnight.

Attention in Japan remained on domestic politics and fiscal policy. Prime Minister Sanae Takaichi’s decision to call a snap election for February, alongside plans to suspend the sales tax on food, unsettled bond investors. Weak demand at a 20-year debt auction pushed yields higher, though the currency reaction was muted. In China, the dollar held near 6.955 against the offshore yuan after the People's Bank of China left benchmark lending rates unchanged for an eighth consecutive month, in line with expectations.

Gold prices climbed sharply early this morning, with spot gold trading around $4,717 per ounce after touching a record $4,722. The move came alongside a softer dollar and followed confirmation that EU leaders will meet later this week to discuss the Greenland dispute. Silver eased slightly to $94.23 after setting a fresh high earlier in the session.

Oil prices were mixed. Brent crude was lower at $63.78 a barrel in early trade, while US WTI hovered near $59.58 as markets reopened after Monday’s US holiday. Support came from China, where official data released on Monday showed stronger-than-expected fourth-quarter growth, annual expansion of 5.0%, and record refinery throughput. Traders also monitored developments in Venezuela after Washington signalled increased involvement in the country’s oil industry, with physical cargoes reportedly offered to Asian buyers at wider discounts.