If you woke up this morning and checked your portfolio, you might’ve felt a bit of a sting. Honestly, it’s been a weird weekend. While we’re all technically in the middle of a long holiday weekend in the States—the markets are closed for Martin Luther King Jr. Day—the rest of the world is basically on fire. Or at least, their trading screens are.
The big question everyone is asking is what is going on with the stock market today, and the answer is surprisingly focused on a giant island of ice. President Trump just threw a massive wrench into global trade by threatening a 25% tariff on eight European allies. Why? Because he wants their support for the U.S. to acquire Greenland. Yeah, you read that right.
The London Stock Exchange and other European hubs are already bracing for a sea of red when they fully process this on Monday. Meanwhile, over in the U.S., the futures are looking pretty shaky. It’s a classic "risk-off" move. People are ditching stocks and piling into gold and silver, which are hitting record highs as we speak.
The Greenland Tariff and the Sunday Scaries
It’s not just a headline; it’s a genuine shock to the system. Traders hate uncertainty more than almost anything else. We just spent most of 2025 getting used to a specific set of trade rules, and now those are being torn up over a geopolitical ambition that most analysts didn't have on their 2026 bingo card.
The Guardian and other major outlets are reporting that the FTSE 100, which actually managed to break the 10,000 mark earlier this month, is now looking at a sharp retreat. It’s a bit of a "wait and see" game for American investors until Tuesday morning, but the "weekend markets" on platforms like IG are already signaling a drop. Basically, if you were hoping for a quiet start to the year, the universe had other plans.
What Is Going On With The Stock Market Today: The Fed and the "Warsh" Factor
Outside of the Greenland drama, there’s this lingering cloud over the Federal Reserve. Jerome Powell is still there, but the rumor mill is spinning fast. President Trump recently hinted that he might not keep Kevin Hassett as the next Fed chair.
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Instead, the name Kevin Warsh is being tossed around as the new frontrunner. Why does this matter to your 404(k)? Because Warsh is often seen as more of a hawk—or at least someone who might not be as quick to cut rates as the market wants.
- The S&P 500 slipped 0.1% on Friday, closing at 6,940.01.
- The Dow fell about 83 points to 49,359.33.
- The Nasdaq dipped 0.1% to 23,515.39.
It wasn't a crash, but it was a "wobble." Investors are essentially holding their breath. They’re trying to figure out if the Fed will actually deliver the rate cuts they promised for 2026 or if "sticky" inflation—which is still hovering around 3%—will force them to keep the brakes on.
Why the "Chip War" is Saving Your Portfolio (For Now)
Despite the tariff talk, there is one area that refuses to die: Semiconductors. Last week, Taiwan Semiconductor (TSM) dropped some massive earnings numbers. They’re basically the backbone of the AI boom, and their optimism is infectious.
Nvidia, Micron, and AMD all saw gains on Friday because the demand for AI chips is still through the roof. There’s even a new trade deal between the U.S. and Taiwan that’s supposed to bring $250 billion into American chip production. So, while the "old economy" stocks like banks and retailers are sweating over tariffs and interest rates, the "new economy" is still humming along.
It’s a tale of two markets. You have the AI "winners" who seem untouchable, and then you have everyone else.
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The Software vs. Semi Divide
Interestingly, software stocks like Palantir and Workday haven't been invited to the party lately. Adam Turnquist over at LPL Financial pointed out something cool, though. He thinks software is so "oversold" right now that we might see a massive rebound soon. It’s like a rubber band that’s been stretched too far. Eventually, it has to snap back.
Is the "CAPE" Alarm for Real?
If you want to get a little nerdy, let's talk about the CAPE ratio. It’s a metric that looks at stock prices relative to earnings over ten years. Right now, it’s sitting at 39.8.
The last time it was this high? The year 2000. Right before the dot-com bubble burst.
Now, does that mean we’re all doomed? Not necessarily. But it does mean that stocks are expensive. Like, "designer-handbag-at-full-price" expensive. Some experts, like those at J.P. Morgan, think we can still see double-digit gains this year because corporate earnings are so strong. Others, like the folks at The Motley Fool, are sounding the alarm, saying a reversal is almost inevitable.
Practical Steps for the Week Ahead
So, what do you actually do with this information? Don't panic, but don't sleep either.
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Keep an eye on the "Safe Havens"
Gold and silver are acting like the "cool kids" of the market right now. If the Greenland tariff situation escalates, expect these to keep climbing. If you don't have any exposure to precious metals, it might be worth looking into a simple ETF just to hedge your bets.
Watch the Tuesday Open
Since U.S. markets are closed today, Tuesday morning is going to be chaotic. Watch the opening bell. If the S&P 500 drops more than 1% in the first hour, it might be a sign that the "Greenland Shock" is stickier than we thought.
Don't Ignore Small Caps
The Russell 2000 actually rose on Friday while the big boys fell. There’s a "rotation" happening. Investors are tired of paying top dollar for Apple and Microsoft and are starting to look at smaller, cheaper companies that could benefit if the U.S. economy stays "resilient," as Cathie Wood recently predicted.
Review Your Tech Weighting
If 90% of your portfolio is Nvidia and TSM, you've had a great run. But with the CAPE ratio screaming and new tariffs on the horizon, it might be a good time to take some "chips" off the table—pun intended—and look at those beaten-down software stocks or even some regional banks like PNC, which just hit a 4-year high.
The market in 2026 is proving to be a wild ride. Between AI supercycles and geopolitical curveballs, the only thing that's certain is that the old rules don't always apply. Stay nimble.