Wait. Did he actually just say Greenland?
If you woke up today, January 18, 2026, and saw your portfolio twitching, you aren’t alone. President Trump just dropped a bombshell that has traders scrambling for their terminals on a Sunday. He is vowing to slap a fresh 10% tariff on eight European nations—including heavyweights like Germany, France, and the UK—unless the U.S. is allowed to buy Greenland. Yes, that Greenland. Again.
Honestly, it feels like a fever dream from 2019, but the market reaction is very real. The euro has already face-planted to a seven-week low in late Sunday trading. Asian markets are starting to catch the shrapnel too.
Stock Market Today: Trump vs. The European Union
The "Greenland or Bust" trade is the latest chapter in what's been a wild second term. Trump announced that starting February 1, these tariffs will hit Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain. If a deal isn't reached by June, that 10% jump becomes a 25% wall.
Wall Street is closed tomorrow for Martin Luther King Jr. Day. That’s a bit of a double-edged sword. On one hand, it gives American investors a day to breathe and realize that Trump’s "Liberation Day" tariffs back in April 2025 didn't actually end the world, even though the S&P 500 took a 5% dive in a single afternoon back then. On the other hand, the uncertainty is going to bake in for 24 extra hours.
Remember the "One Big Beautiful Bill Act"? That piece of legislation from last July is basically the only thing keeping the bulls from running off a cliff right now. It extended the 2017 tax cuts and boosted corporate earnings by roughly $100 billion. Investors are essentially weighing "cheaper taxes" against "expensive imports." Right now, taxes are winning, but the margin is getting thin.
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Why some stocks are actually winning
It’s weirdly not all red. European defense shares are actually tickling record highs because geopolitical tension usually means more spending on hardware. Also, companies like Nvidia are still riding the AI data center boom.
According to Holger Schmieding, the chief economist at Berenberg, we’re in for a "small setback" rather than a total collapse. He thinks investor sentiment has become surprisingly resilient. We've seen this movie before. Trump threatens a massive tariff, the market freaks out, he makes a bilateral deal, and everyone buys the dip.
But there is a new wrinkle: credit cards.
Trump is pushing a 10% cap on credit card interest rates. Seeking Alpha analysts are already pointing out that while network giants like Visa and Mastercard might be okay because they live on swipe fees, the "issuers" are in the crosshairs. If you hold Synchrony (SYF) or Capital One (COF), today's news isn't just about Greenland; it's about a fundamental shift in how these banks make money from interest.
The Fed and the "Too Late" Problem
Jerome Powell’s term expires in May 2026. That is the elephant in the room. Trump has been calling him "Too Late" for months, accusing him of mismanaging everything from interest rates to the renovation costs of the Fed headquarters.
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The stock market today under Trump is basically a bet on who replaces Powell. If Trump picks a "dove" who wants to slash rates to zero to offset tariff costs, stocks might actually moon. But if the bond market smells 1970s-style inflation because of 18% average effective tariffs, those "safe" Treasury bonds might start looking like a dumpster fire.
Real-world impact on your 401k
Let’s talk numbers. The S&P 500 is up about 1.3% so far this year. That’s modest. Since Inauguration Day in 2025, the index is up over 15%. Not bad, right? But the "Presidential Election Cycle Theory" says year two—which is right now—is usually the suckiest year for returns.
Volatility is the name of the game in 2026. You’ve got:
- The Yale Budget Lab forecasting a 14.4% effective tariff rate.
- A projected $3.4 trillion increase in federal debt over the next decade.
- Midterm elections looming in November where Trump might lose the House.
If the Democrats take back the House, the "One Big Beautiful Bill" era of easy tax cuts might hit a brick wall. Traders are already pricing in that "lame duck" risk.
What you should actually do right now
Don't panic-sell your index funds because of a headline about Greenland. We’ve learned that this administration uses tariffs as a giant neon "Let's Talk" sign.
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Watch the $1.15 level on the Euro. If it breaks below that, European exporters (think cars and luxury goods) are going to get crushed, even if the weak currency helps them stay competitive.
Keep an eye on the "termite" effect. Economist Robert Lawrence recently noted that tariffs are like termites. They don't knock the house down overnight, but they eat the foundation. If you see "input cost increases" mentioned in the Fed's next Beige Book, that's your signal that inflation is stickier than the White House admits.
Actionable Insights for the week ahead:
- Diversify into AI/Infrastructure: These sectors have shown the most "tariff-immunity" because the demand for data centers is domestic and massive.
- Review your Financials: If the 10% interest rate cap on credit cards gains legislative traction, high-interest lenders are going to see their margins evaporate.
- Wait for Tuesday: With U.S. markets closed Monday, let the "Greenland shock" settle. The first 30 minutes of trading on Tuesday morning will tell you if this is a blip or a trend.
The stock market today under Trump is a high-stakes poker game where the rules change every time someone tweets—or, well, posts on Truth Social. Stay nimble, keep your stop-losses tight, and maybe buy a map of the North Atlantic. It looks like we're going to be talking about it for a while.
Key Takeaways for January 2026
The immediate reaction to the Greenland tariff threat will likely be a flight to safety, boosting the U.S. Dollar and potentially Bitcoin, which has stayed steady around $95,330. However, the long-term health of the S&P 500 depends on whether the Federal Reserve can navigate the inflationary pressure of a 12-15% effective tariff rate without choking off growth. Investors should prepare for a volatile Q1 as the administration tests the limits of executive trade authority before the Supreme Court weighs in on the IEEPA later this spring.