The US president said he will impose additional 10% tariffs from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK. The rate will rise to 25% on June 1 if no agreement is reached on Greenland, a territory coveted by the United States.

The response from the eight European countries targeted by the new duties was swift. In a joint statement, they voiced solidarity with Greenland and denounced the US president's new threats. "Tariff threats weaken transatlantic relations and are a dangerous downward spiral,” the European nations said.

On the issue, Christopher Dembik, an investment strategy adviser at Pictet AM, expects that "Europeans will threaten to pull back from the EU-US trade agreement, whose ratification was already poorly underway before the weekend's events at the European Parliament. In addition, the Supreme Court could issue an opinion as early as tomorrow on the customs duties announced by the Trump administration last April. All of this creates the perfect cocktail for a renewed bout of stockmarket volatility at the start of the week. It is likely that corporate earnings will take a bit of a back seat, for the time being.”

Following the tariff announcement, stocks in the luxury, automotive, wines and spirits, and banking sectors stumbled. LVMH posted the steepest decline in the CAC 40, down almost 5%. The sector heavyweight was also hit by a Morgan Stanley note, which downgraded its rating on LVMH from Overweight to Equal-weight, while maintaining its target price at €635. The group is seen in a better position than a year ago. Its two flagship brands, Louis Vuitton and Dior, are regaining positive momentum, which should translate into Q4 2025 results that exceed consensus. Despite this recovery, we see more downside than upside risk to 2026 EPS estimates, the analyst said.

By contrast, amid the Greenland tensions, defense stocks jumped. Thales led the CAC 40, up 2.41%, while Dassault Aviation posted the biggest gain in the SBF 120, rising over 3.5%.

In Europe, Ageas rose nearly 3% in Brussels, after raising its 2025 net operating profit forecast, linked to a one-off positive impact on deferred taxes included in the 2025 annual result of its Chinese joint venture, Taiping Life.

In terms of data, investors will look to euro zone December inflation figures, out at 11 a.m.

In commodities, gold climbed to a new record at $4,690.59 an ounce, while silver topped $94 for the first time.

This week will be marked by annual earnings releases on both sides of the Atlantic, including those from Netflix, Intel, LVMH and Ericsson.