March S&P 500 E-Mini futures (ESH26) are down -1.58%, and March Nasdaq 100 E-Mini futures (NQH26) are down -1.95% this morning, pointing to a sharply lower open on Wall Street as sentiment took a hit after U.S. President Donald Trump threatened to impose new tariffs on a handful of European countries amid a dispute over Greenland.
President Trump announced in a Truth Social post on Saturday that exports from eight European countries—Germany, France, the U.K., the Netherlands, Sweden, Denmark, Finland, and Norway—will face 10% tariffs starting February 1st. Those are the countries opposing his bid to control Greenland. Trump said the levies would rise to 25% in June and remain in place until a deal is reached “for the complete and total purchase of Greenland.” In response, European officials are considering a range of countermeasures, including potential retaliatory tariffs on $108 billion of U.S. exports.
President Trump said on Tuesday he agreed to hold a meeting at the World Economic Forum in Davos over Greenland following a “very good” call with NATO Secretary-General Mark Rutte. “I had a very good telephone call with Mark Rutte, the Secretary General of NATO, concerning Greenland,” Trump said. As Trump heads to Davos, he reiterated his rhetoric on Greenland, writing in a Truth Social post that the territory is “imperative for National and World Security.”
Stock index futures losses deepened after a selloff in Japanese long-term bonds sparked a sharp rise in global bond yields. The 10-year T-note yield climbed 6 basis points to 4.29% on negative carryover from a surge in long-term Japanese bond yields to record highs as investors pushed back against Prime Minister Sanae Takaichi’s election pitch to cut taxes on food.
Investor focus this week is also on a fresh batch of U.S. economic data, with particular attention on the delayed U.S. PCE inflation reading, as well as a slew of corporate earnings reports.
In Friday’s trading session, Wall Street’s major equity averages closed slightly lower. Shares of power suppliers sank on President Trump’s move to push for an emergency wholesale electricity auction and make tech giants pay for rising power costs, with Talen Energy (TLN) plunging over -11% and Constellation Energy (CEG) sliding more than -9% to lead losers in the S&P 500 and Nasdaq 100. Also, Mosaic (MOS) slid over -4% after the chemical company posted weak preliminary Q4 results. In addition, J.B. Hunt Transport Services (JBHT) fell more than -1% after the transportation and logistics company reported weaker-than-expected Q4 revenue. On the bullish side, Micron Technology (MU) climbed over +7% and was the top percentage gainer on the Nasdaq 100 after the company disclosed in a regulatory filing that director Teyin Liu bought about $7.8 million worth of shares.
Economic data released on Friday showed that U.S. industrial production rose +0.4% m/m in December, stronger than expectations of +0.1% m/m, and manufacturing production unexpectedly rose +0.2% m/m, stronger than expectations of -0.2% m/m.
Fed Vice Chair Philip Jefferson said on Friday that interest rates are close to a level that neither restrains nor stimulates the economy. “In my view, the current policy stance leaves us well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving outlook, and the balance of risks,” Jefferson said. At the same time, Fed Vice Chair for Supervision Michelle Bowman said monetary policy remains moderately restrictive and that policymakers should be ready to cut interest rates further unless the employment picture improves. “We should also avoid signaling that we will pause without identifying that conditions have changed. Doing so will indicate that we are not attentive or responsive to the recent and expected path of the labor market,” Bowman said.
U.S. rate futures have priced in a 95.0% chance of no rate change and a 5.0% chance of a 25 basis point rate cut at the conclusion of the Fed’s January meeting.
In this holiday-shortened week, the November reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be the main highlight, as investors continue to gauge the likely timing and extent of additional rate cuts by the Fed. The core PCE price index for November was originally scheduled for release on December 19th, but was delayed due to the fallout from the longest-ever government shutdown. Notably, the release will also incorporate the October figures. To fill in for data gaps in the October figures caused by the shutdown, the Bureau of Economic Analysis said it will use the average of September and November consumer price index data. The final estimate of third-quarter U.S. gross domestic product will also attract attention. Other noteworthy data releases include U.S. Pending Home Sales, Construction Spending, Initial Jobless Claims, Personal Spending, Personal Income, the S&P Global Manufacturing PMI (preliminary), the S&P Global Services PMI (preliminary), and the University of Michigan’s Consumer Sentiment Index.
Fourth-quarter corporate earnings season heats up this week, with investors looking forward to fresh reports from major companies such as Netflix (NFLX), Intel (INTC), Johnson & Johnson (JNJ), GE Aerospace (GE), The Procter & Gamble Company (PG), Abbott Laboratories (ABT), Intuitive Surgical (ISRG), and 3M (MMM). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +8.4% increase in quarterly earnings for Q4 compared to the previous year.
U.S. central bankers are in a media blackout period before the January 27-28 policy meeting, so they are prohibited from making public comments on the economic outlook or policy this week. Fed policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Fed blackout periods.
The U.S. Supreme Court will hear oral arguments this week in Fed Governor Lisa Cook’s challenge to President Trump’s efforts to fire her.
Meanwhile, the annual World Economic Forum in Davos, Switzerland, takes place this week, with a number of major world leaders and central bankers, including U.S. President Donald Trump, scheduled to speak. Trump’s address to Davos on Wednesday is expected to be the most closely watched event on the agenda.
The U.S. economic data slate is empty on Tuesday.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.291%, up +1.37%.
The Euro Stoxx 50 Index is down -1.20% this morning, extending losses from the previous session as U.S. President Donald Trump doubled down on tariff threats against countries opposing his plan to acquire Greenland. President Trump said he would “100%” move forward with imposing tariffs on European nations if his demands are not met. The U.S. president has also threatened 200% tariffs on French wines and champagnes to pressure French President Emmanuel Macron to join his peace board for Gaza. Utility stocks led the declines on Tuesday, with BKW AG (BKW.Z.EB) plummeting over -11% after it cut its guidance. Industrial, bank, and healthcare stocks also slumped. Meanwhile, Citi strategists, including Beata Manthey, downgraded European equities to Neutral for the first time in more than a year, saying renewed transatlantic tensions have cast doubt on expectations for an earnings recovery this year. On the economic front, the ZEW economic research institute said on Tuesday that German investor morale jumped in January as expectations for Germany’s economic outlook improved. “The ZEW Index is rising strongly. 2026 could mark a turning point,” said ZEW president Achim Wambach. Separately, data showed the U.K. unemployment rate held steady in the three months through November, when it was expected to fall, while wage growth continued to moderate.
U.K. Average Earnings ex Bonus, U.K. Unemployment Rate, Germany’s PPI, Eurozone’s Current Account, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.
U.K. Average Earnings ex Bonus stood at 4.5% in the three months to November, in line with expectations.
The U.K. Unemployment Rate was 5.1% in the three months to November, weaker than expectations of 5.0%.
The German December PPI fell -0.2% m/m and -2.5% y/y, compared to expectations of -0.2% m/m and -2.4% y/y.
Eurozone’s November Current Account stood at 8.6 billion euros, weaker than expectations of 20.3 billion euros.
The German January ZEW Economic Sentiment Index came in at 59.6, stronger than expectations of 50.0.
The Eurozone January ZEW Economic Sentiment Index arrived at 40.8, stronger than expectations of 36.7.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.01%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.11%.
China’s Shanghai Composite Index closed just below the flatline today. Satellite, defense, and rare earth stocks led the declines on Tuesday. Those sectors had been targeted by speculators but saw sharp pullbacks after regulators tightened measures against speculation and abnormal trading practices. Over the past week, the Shanghai and Shenzhen stock exchanges each took regulatory action against hundreds of abnormal trading practices, including price pumping and false orders. Limiting losses, electric stocks jumped, extending recent gains amid surging global demand for power equipment to build AI data centers, along with a state-led investment push in the sector. Also, real estate stocks climbed as weak December data fueled hopes for fresh government support. Meanwhile, China’s benchmark lending rates were kept unchanged on Tuesday, as expected, after the central bank lowered rates on its structural monetary policy tools last week. The one-year loan prime rate (LPR) was held at 3.0%, while the five-year LPR remained unchanged at 3.5%, according to the People’s Bank of China. China’s state planner said on Tuesday that the country plans to introduce new policies for 2026-2030 to boost domestic consumption and address “prominent” supply-demand imbalances, with a particular focus on the services sector. Separately on Tuesday, China’s finance ministry unveiled a series of incentives to spur investment and consumption, led by a 500 billion yuan ($71.8 billion) loan-guarantee facility. The Ministry of Finance also announced that it is extending consumer-loan discounts through the end of this year. In corporate news, Pop Mart jumped over +9% in Hong Kong after the company announced its first share buyback in nearly two years.
Japan’s Nikkei 225 Stock Index closed sharply lower today as growing concerns over the nation’s public finances weighed on sentiment. Brokerage and electronics stocks led the declines on Tuesday. At the same time, food and beverage stocks advanced on rising hopes that a consumption tax cut is forthcoming. When Japanese Prime Minister Sanae Takaichi confirmed on Monday plans to dissolve the lower house of parliament to pave the way for snap elections, she said her party is considering a plan to suspend the sales tax on food and beverages for two years. However, such a move could significantly reduce government revenue, potentially stoking concerns over the sustainability of Japan’s large debt. “Even if the consumption tax cut is said to be temporary, the risk of it becoming permanent is high, and the burden on public finance is significant,” according to Citi’s Tomohisa Fujiki. As a result, Japan’s long-term government bond yields jumped to record highs on Tuesday, with the 40-year rate surging past 4%. A lackluster auction of 20-year bonds on Tuesday highlighted broader concerns about government spending and inflation. Investor focus this week is also on the Bank of Japan’s monetary policy decision. The central bank is widely expected to leave its benchmark rate unchanged at 0.75% following last month’s hike. Market watchers will closely follow Governor Kazuo Ueda’s post-decision press conference for signals on the timing of the central bank’s next rate hike. Attention will also be on the BOJ’s quarterly outlook report, which will provide its latest growth and price forecasts. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +10.76% to 32.84.
Pre-Market U.S. Stock Movers
The Magnificent Seven stocks sank in pre-market trading amid risk-off sentiment, with Alphabet (GOOGL) and Amazon.com (AMZN) falling over -3%.
Chip stocks slid in pre-market trading, with Marvell Technology (MRVL) falling over -3% and Advanced Micro Devices (AMD) dropping more than -2%.
Cryptocurrency-exposed stocks fell in pre-market trading, with the price of Bitcoin down more than -1%. Strategy (MSTR) is down more than -5%. Also, MARA Holdings (MARA) and Coinbase (COIN) are down over -4%.
Ciena (CIEN) slumped more than -6% in pre-market trading after BofA downgraded the stock to Neutral from Buy.
RAPT Therapeutics (RAPT) soared over +63% in pre-market trading after GSK agreed to acquire the company for $58 a share.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - January 20th
Netflix (NFLX), Interactive Brokers (IBKR), 3M (MMM), U.S. Bancorp (USB), Fastenal (FAST), DR Horton (DHI), United Airlines Holdings (UAL), Fifth Third (FITB), KeyCorp (KEY), Wintrust (WTFC), Zions (ZION), Hancock Whitney (HWC), Bank Ozk (OZK), ServisFirst Bancshares (SFBS), Simmons First National (SFNC), Progress (PRGS), Karooooo (KARO), Forestar (FOR), Peoples Bancorp (PEBO), Mercantile (MBWM), SmartFinancial Inc (SMBK).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/Amazon%20-%20Image%20by%20bluestork%20via%20Shutterstock.jpg)
/Micron%20Technology%20Inc_logo%20and%20website-by%20Mojahid%20Mottakin%20via%20Shutterstock.jpg)
/Salesforce%20Inc%20HQ%20building-by%20JHVEPhoto%20via%20Shutterstock.jpg)
