Honestly, if you were hoping for a quiet Sunday to relax before the markets open, President Trump’s latest move just tossed a wrench into those plans. The big headline for stock market news today isn't coming from a trading floor in Manhattan—since those are closed for the Martin Luther King Jr. holiday—but from a fresh wave of geopolitical friction that has the "weekend markets" looking pretty ugly.
Basically, Trump just threatened eight European countries with 25% tariffs. The reason? He wants them to back his bid to acquire Greenland. It sounds like a plot from a political thriller, but the market reaction is very real. Over on the IG weekend markets, which give us a sneak peek at how investors are feeling while the big exchanges are dark, the Dow is already indicated to open down by about 0.5% when Tuesday rolls around.
The Greenland Gambit and Your Portfolio
You’ve probably seen some wild headlines, but here is the brass tax. Uncertainty is the absolute poison of the stock market. When the U.S. threatens allies with massive levies, it doesn't just hurt the "other guys." It threatens the stability of NATO and last year’s hard-won trade agreements.
Gold is already sniffing out the fear. It’s trading near $4,625 an ounce today. People are running toward safe havens because nobody knows if this is just a negotiation tactic or the start of a genuine trade war with Europe. If you're holding tech or industrials, you'll want to watch the open on Tuesday very closely.
What Actually Happened Last Week?
Before we get too caught up in the Greenland drama, we need to look at the momentum we're carrying into this week. Last Friday wasn't exactly a victory lap. The S&P 500 slipped just a tiny bit, closing at 6,940.01. It’s been a weirdly stagnant month for U.S. equities, even though international markets have been on a bit of a tear lately.
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One of the biggest drags lately has been the financial sector. Over the weekend, Trump floated the idea of capping credit card interest rates at 10%. That sent a shiver through the big banks. Visa and Mastercard took a beating, dropping 4.5% and 3.8% respectively last Tuesday, and they haven't really recovered that ground yet.
Sector Winners and Losers
- Chipmakers: Intel and AMD are the clear darlings right now. KeyBanc gave them a big "overweight" rating, citing massive demand for AI chips. Intel actually surged nearly 9% in a single session.
- Software: Salesforce is having a rough go of it. Their new "Slackbot" update didn't impress Wall Street, and the stock ended up being the worst performer in the S&P 500 recently.
- Airlines: Delta’s profit forecasts came in lower than people liked, which dragged down the broader travel sector.
The Fed is Playing Hard to Get
Everyone is obsessed with interest rates. It’s basically the only thing people talk about at cocktail parties for traders. But the "Goldilocks" scenario of endless rate cuts is starting to look like a fairy tale.
J.P. Morgan’s chief economist, Michael Feroli, dropped a bit of a bombshell recently. He thinks the Fed is done. After three cuts at the end of 2025, the consensus is shifting toward a "long pause" for all of 2026. Why? Because core inflation is stuck above 3%.
You've gotta realize that even though Jerome Powell’s term is ending in May, the 12-member FOMC isn't just going to start slashing rates because a new Chair is in town. They are terrified of inflation becoming "entrenched." If the labor market stays this tight—unemployment is currently sitting at a steady 4.4%—there’s zero incentive for them to give us cheaper money.
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Looking Ahead: Davos and Earnings
This week is a sprint. Since Monday is a holiday, we're packing five days of drama into four.
1. The Davos Speech
President Trump is headed to the World Economic Forum in Davos, Switzerland. He’s expected to speak on Wednesday. He’ll likely double down on his housing reform ideas and, if today’s news is any indication, probably turn up the heat on those European tariffs. Expect the 10-year Treasury yield, which is hovering around 4.23%, to jump around while he's talking.
2. Big Tech Earnings
This is the "make or break" moment for the AI hype. Netflix and Intel are the headliners this week. If Netflix shows that their ad-tier growth is slowing, or if Intel can't prove that those AI chip orders are turning into actual cash, the Nasdaq could be in for a painful correction.
3. The Delayed Data Dump
Because of the government shutdown last year, federal workers are still playing catch-up. This week, we finally get the "delayed" PCE price index (the Fed’s favorite inflation gauge) for October and November. If these numbers come in "hot," you can kiss any hope of a mid-year rate cut goodbye.
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Why You Shouldn't Panic (Yet)
Look, stock market news today might feel like a series of "uh-oh" moments, but let's keep some perspective. J.P. Morgan is still forecasting double-digit gains for global equities this year. The "Rubin" chip release from Nvidia is expected to be a massive catalyst, with some analysts predicting Nvidia will become the first $6 trillion company later this year.
The U.S. economy is still growing at about 2% annually. That’s not a recession; that’s just a "normalization."
Practical Next Steps for Your Portfolio
- Check Your Bank Exposure: With the 10% interest rate cap talk, banks are volatile. If you're heavy on Financials, it might be time to look at some "defensive" sectors like Healthcare, which was the clear leader in Q4.
- Watch the $4,642 Gold Level: If gold breaks its previous record high this week, it’s a sign that "smart money" is genuinely scared of a trade war.
- Don't Chase the Chip Hype: Intel and AMD are soaring, but their valuations are getting "priced for perfection." If they miss even a tiny bit on earnings this week, the drop will be fast and loud.
- Keep an Eye on the 10-Year Yield: If it climbs toward 4.5%, growth stocks (tech) will likely see their prices suppressed as borrowing costs stay high.
The reality is that Tuesday’s open is going to be a gut-check. Between the Greenland tariff threats and the looming Davos speech, the market is looking for a reason to sell off some of its recent gains. Stay liquid, stay informed, and don't make any emotional trades at 9:31 AM on Tuesday morning.