Other major European indices—with the Dax standing out as the day's biggest loser, down 1.14%—also came under pressure following Donald Trump's latest announcements, clouding investor sentiment globally and sparking a rush toward safe-haven assets. Gold surged to a new record above $4700 per ounce, while silver climbed to $95.89. On Wall Street, which reopened after a long weekend, nerves were also frayed, with the Dow Jones and Nasdaq down 1.26% and 1.47%, respectively, as of 5:45 p.m.

Eight European countries, including France, the United Kingdom, and Germany, which have deployed troops in Greenland, would be targeted by a 10% surcharge starting February 1, rising to 25% on June 1. These measures would remain in place until a possible acquisition of Greenland by the United States, a threat that is reigniting tensions between Washington and its European allies.

The American president has also raised the prospect of tariffs of up to 200% on French wines and champagnes.

Tensions at Davos

 These economic and geopolitical tensions come as the World Economic Forum kicked off Tuesday in Davos. In Switzerland, Ursula von der Leyen promised a "firm" response and warned that raising tariffs would be a "mistake." The twenty-seven EU members are considering retaliatory measures and will discuss Greenland at an emergency summit called for Thursday in Brussels. Donald Trump is expected in Davos on Wednesday, while his French counterpart Emmanuel Macron has called on the EU to mobilize its "very powerful" trade tools in response to rising tensions.

Renault in the Green, Luxury and Capgemini Struggle

 Meanwhile, Donald Trump could make a decision on the next chair of the Federal Reserve as early as next week, Treasury Secretary Scott Bessent said Tuesday. "We're down to four candidates and Donald Trump has spoken with each of them," Bessent said in an interview with CNBC.

On the Paris stock exchange, Renault (+2.25%) led the CAC 40. The automaker reported annual commercial performance up 3.2% in a market that grew by 1.6%.

Meanwhile, Capgemini (-2.77%) finished at the bottom of the pack, as the IT giant considers cutting up to 2400 jobs in France.

With new tariff threats looming—notably for wine and champagne—the luxury sector was particularly hard hit, with LVMH (-2.20%) leading the declines.