Global investors expressed caution as markets reacted to renewed geopolitical tensions following United States President Donald Trump’s threat to pursue Greenland, raising concerns over a potential trade conflict with Europe, Reuters reports.

Volatility across asset classes rose sharply on Tuesday, with US stocks, long-dated Treasuries, and the dollar selling off. The sell-off followed Trump’s threat to rekindle a trade war with Europe, prompting concern among investors.

“Global investors are taking these threats seriously,” Jack Ablin, founding partner and chief investment strategist at Cresset Capital, told Reuters. “I would have thought after Liberation Day that a lot of investors would fade the selloff and try to pick a bottom, but that doesn’t appear to be happening this time around.”

Also, the president of Chase Investment Counsel in Charlottesville, Virginia, Peter Tuz, said, “The market peaked in late January, early February. Then, as the tariff news hit the headlines, the market had a pretty good correction. I hope it doesn’t turn out to be as dramatic.”

The head of the global market strategy team at New York Life Investments, Lauren Goodwin, added, “A day like Tuesday, where the bond yields are up, equities have fallen, and the dollar sells off … causes people to rethink some of their assumptions.”

On Wednesday, Trump ruled out the use of force in Greenland but reiterated that no other country could secure the Danish territory, helping US stocks and the dollar recover some of Tuesday’s losses.

Commenting further, the Chief Investment Officer at Facet in Phoenix, Maryland, Tom Graff, said, “I definitely think traders are worried about going all in on a down trade because of the potential for a ‘TACO’.” He referred to the Wall Street acronym “Trump Always Chickens Out”, describing Trump’s tendency to escalate threats only to later back down.

The PUNCH reported that global markets are expected to face renewed volatility after United States President Trump threatened to impose tariffs on eight European nations over a dispute regarding Greenland.