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 selloff this morning as world leaders at Davos woke up to the news that U.S. President Trump had texted the prime minister of Norway to say that his repeated threats to take over Greenland were based on the fact that he didn’t win the Nobel Peace Prize.

“Considering your Country decided not to give me the Nobel Peace Prize … I no longer feel an obligation to think purely of Peace, although it will always be predominant, but can now think about what is good and proper for the United States of America,” Trump’s message to Jonas Gahr Støre said. “The World is not secure unless we have Complete and Total Control of Greenland.”

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

Late last night, Trump posted again on social media, “NATO has been telling Denmark, for 20 years, that ‘you have to get the Russian threat away from Greenland.’ Unfortunately, Denmark has been unable to do anything about it. Now it is time, and it will be done!!!”

Traders, dismayed by the prospect of a renewed trade war between the U.S. and Europe, reacted by driving down equities all over the world.

S&P 500 futures were down 1.12% this morning—an unusually steep drop. The last session closed flat. (Markets in the U.S. are closed for Martin Luther King Jr. Day.) The STOXX Europe 600 fell 1.25% in early trading, and the U.K.’s FTSE 100 was down 0.49% before lunch. Japan’s Nikkei 225 was down 0.65%. China’s CSI 300 was flat. India’s NIFTY 50 was down 0.42%. Bitcoin declined to $93K. The only major national index having 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’s analysts broadly agree that President Trump’s repeated threats to force Denmark to “give back” Greenland and to impose an escalating series of trade tariffs on the U.K. and E.U. if those countries don’t comply are bad for equities globally. They differ only in their assessment of how bad this will get.

ING’s Carsten Brzeski and Bert Colijn told clients, “Overall, we can only repeat our earlier estimates that additional tariffs of 25% would probably shave 0.2 percentage points off European GDP growth. However, this model-based estimate definitely falls short in capturing the full impact of new uncertainty and geopolitical tensions as a result of escalated tensions.”

They also cautioned, “As has been the case before, it is not exactly clear how this will work out as there has been no official communication from the White House, yet, just Trump’s announcement on social media.”

The pair also warned that Trump may be underestimating how resistant Europe is going to be. “While Europe, at least initially, seems to be determined to stand up against the latest tariff threat and the U.S. President’s claims on Greenland, the reality is that Europe is still dependent on the U.S. in many ways, both from an economic and security point of view. This was likely one of the central reasons behind the E.U.’s agreement last summer to agree to a trade deal with the U.S. that did not benefit Europe. Whether the new tariff threat and the situation in Greenland turn out to be the tipping point that finally triggers European unity and Europe’s rise as a geopolitical power remains to be seen. What is clear is that a full-blown trade war between the E.U. and the U.S. would leave only losers.”

At UBS, Paul Donovan’s morning note warned that new tariffs could rebound against American consumers. “Threatened U.S. tariffs appear more serious than those relating to Iran … they imply U.S. consumer prices of goods from the E.U. and UK will increase 4% to 10% (within about six months). This may reinforce the narrative of the U.S. affordability crisis.”

“Policy uncertainty is resurrected for U.S. businesses. This has constrained investment and hiring, but might have faded as firms adapt. Uncertainty on this scale may again put U.S. corporate activity on pause.”

There is also the question of whether Trump has enough domestic political capital to sustain 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% against. Only 4% approved of using 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 ahead of the opening bell in New York this morning:

• S&P 500 futures were down 1.12% this morning. The last session closed flat. Markets in the U.S. are closed for MLK Day.
• STOXX Europe 600 was down 1.25% in early trading.
• The U.K.’s FTSE 100 was down 0.49% in early trading. 
• Japan’s Nikkei 225 was down 0.65%.
• China’s CSI 300 was flat. 
• The South Korea KOSPI was up 1.32%. 
• India’s NIFTY 50 was down 0.42%. 
• Bitcoin was down to $93K.

This story was originally featured on Fortune.com