The S&P 500 Index ($SPX) (SPY) on Tuesday closed down -2.06%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -1.76%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -2.12%. March E-mini S&P futures (ESH26) fell -2.02%, and March E-mini Nasdaq futures (NQH26) fell -2.10%.
Stock indexes plummeted on Tuesday, with the S&P 500 and Nasdaq 100 falling to 1-month lows, and the Dow Jones Industrial falling to a 2-week low. Rising geopolitical tensions between the US and Europe over control of Greenland have led to a risk-off mood in asset markets. President Trump’s push to take over Greenland is reviving fears of trade confrontations between the US and its European allies, with little sign of de-escalation. Overnight, President Trump threatened steep tariffs on French champagne after French President Macron ruled out joining a US-led peace initiative. President Trump over the weekend announced a 10% tariff on goods from eight European countries starting February 1, rising to 25% in June, unless there’s a deal for the “purchase of Greenland.”
Rising bond yields also weighed on stocks on Tuesday. The 10-year T-note yield jumped to a 4.75-month high of 4.31% on Tuesday, driven by concern about an independent Fed and negative carryover from soaring Japanese government bond yields. Japan’s 10-year JGB bond yield rose to a 27-year high on Tuesday of 2.359% on Japanese fiscal concerns after Prime Minister Sanae Takaichi promised a temporary sales tax cut on food if she wins a fresh mandate for her new coalition.
The strength of gold and silver mining companies on Tuesday was a positive factor for stocks, as the Greenland crisis prompted safe-haven buying of precious metals and pushed their prices to all-time highs. Also, concerns that Japan's expansionary fiscal policies will lead to soaring deficits are boosting demand for precious metals as a store of value.
US natural gas-producing stocks soared on Tuesday as the price of nat-gas (NGG26) surged more than +26% to a 3-week high.
The market’s focus this week will be on economic news and any fresh tariff developments, the next Fed Chair, and Greenland. On Wednesday, Dec pending home sales are expected to fall -0.5% m/m. On Thursday, initial weekly unemployment claims are expected to climb by +12,000 to 210,000. Also, Q3 GDP is expected to be unrevised at +4.3% (q/q annualized). In addition, Nov personal spending is expected to be up +0.5% m/m, and Nov personal income is expected to rise +0.4% m/m. Finally, the Nov core PCE price index (the Fed’s preferred inflation gauge) is expected to rise by +0.2% m/m and +2.8% y/y. On Friday, the Jan S&P US manufacturing PMI is expected to be up by +0.2 to 52.0. Also, the final University of Michigan Jan US consumer sentiment index is expected to be unrevised at 54.0.
Q4 earnings season begins in earnest this week and, so far, has been a positive factor for stocks, with 88% of the 33 S&P 500 companies that have reported beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4. Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
The Supreme Court on Tuesday did not issue a ruling on challenges to President Trump’s reciprocal tariffs. The court did not say when it will issue its next opinions, meaning it will likely be at least another month before ruling on the tariffs, as the court begins a four-week recess.
The markets are discounting the odds to 5% for a -25 bp rate cut at the FOMC’s next meeting on January 27-28.
Overseas stock markets settled lower on Tuesday. The Euro Stoxx 50 fell to a 2-week low and closed down by -0.57%. China’s Shanghai Composite dropped to a 1.5-week low and closed down by -0.01%. Japan’s Nikkei Stock 225 closed down by -1.11%.
Interest Rates
March 10-year T-notes (ZNH6) on Tuesday closed down by -10.5 ticks. The 10-year T-note yield rose by +7.0 bp to 4.293%. Mar T-notes tumbled to a 5-month low on Tuesday, and the 10-year T-note yield rose to a 4.75-month high of 4.307%. Rising inflation expectations are bearish for T-notes after the 10-year breakeven inflation rate climbed to a 3.25-month high of 2.342% on Tuesday. Also, negative carryover from a surge in global bond yields, triggered by Tuesday's jump in the 10-year Japan bond yield to a 27-year high, of 2.359%, weighed on T-notes. Markets are concerned that if JGB yields continue to rise, Japanese investors, the largest holders of US debt securities, will sell their US assets and move capital back to Japan.
T-notes are also under pressure after President Trump last Friday expressed reluctance to name Keven Hassett as the next Fed Chair and said he would prefer to keep him as National Economic Council director. The markets saw Hassett as the most dovish candidate and the top contender for the Fed Chair nomination, so nominating someone like Kevin Warsh, a known hawk and the second-most-likely Fed Chair candidate, would be bearish for T-note prices.
European government bond yields moved higher on Tuesday. The 10-year German bund yield rose to a 2-week high of 2.894% and finished up +1.9 bp to 2.859%. The 10-year UK gilt yield climbed to a 2-week high of 4.495% and finished up +4.3 bp to 4.458%.
The German Jan ZEW survey expectations of economic growth rose +13.8 to a 4.5-year high of 59.6, stronger than expectations of 50.0.
German Dec PPI fell -2.5% y/y, weaker than expectations of -2.4% y/y and the largest drop in 20 months.
Swaps are discounting a 0% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.
US Stock Movers
The Magnificent Seven technology stocks sold off on Tuesday, weighing on the overall market. Nvidia (NVDA) and Tesla (TSLA) closed down more than -4%. Also, Apple (AAPL) and Amazon.com (AMZN) closed down by more than -3%, and Meta Platforms (META) and Alphabet (GOOGL) closed down by more than -2%. In addition, Microsoft (MSFT) closed down more than -1%.
Cryptocurrency-exposed stocks slid on Tuesday, as Bitcoin (^BTCUSD) tumbled more than -3% to a 2-week low. Mara Holdings (MARA) closed down more than -8%, and Strategy (MSTR) closed down more than -7% to lead losers in the Nasdaq 100. Also, Galaxy Digital Holdings (GLXY) closed down by more than -6%, Coinbase Global (COIN) closed down by more than -5%, and Riot Platforms (RIOT) closed down by more than -4%.
Gold and silver mining stocks rallied on Tuesday as gold and silver prices soared to new all-time highs. Hecla Mining (HL) closed up more than +7%, and Newmont Mining (NEM) closed up more than +4%. Also, Barrick Mining (B) closed up more than +2%, and Coeur Mining (CDE) and Freeport McMoRan (FCX) closed up by more than +1%.
US natural gas-producing stocks soared on Tuesday as the price of nat-gas surged more than +26% to a 3-week high. Expand Energy (EXE) closed up more than +4%. Also, Coterra Energy (CTRA), Antero Resources (AR), Range Resources (RRC), CNX Resources (CNX), and EQT Corp (EQT) closed up more than +1%.
Defensive beverage makers rose on Tuesday amid the broader market's plunge. Monster Beverage (MNST) closed up more than +4% to lead gainers in the Nasdaq 100. Also, Constellation Brands (STZ) closed up more than +4%, and Brown Forman Corp (BF.B) and Molson Coors Beverage (TAP) closed up more than +2%. In addition, Keurig Dr Pepper (KDP) and Coca-Cola Co (KO) closed up more than +1%.
NetApp (NTAP) closed down more than -9% to lead losers in the S&P 500 after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $89.
3M Co. (MMM) closed down more than -6% to lead losers in the S&P 500 and Dow Jones Industrials after forecasting 2026 adjusted EPS of $8.50-$8.70, the midpoint below the consensus of $8.64.
Rockwell Automation (ROK) closed down more than -4% after Oppenheimer downgraded the stock to perform from outperform.
Fastenal (FAST) closed down more than -3% after reporting Q4 net sales of $2.03 billion, below the consensus of $2.04 billion.
AppLovin (APP) closed down by more than 1% after a negative research report from CapitalWatch raised concerns about systemic compliance risks and suspicions of financial crimes.
RAPT Therapeutics (RAPT) closed up more than +62% after GSK Plc agreed to buy the company for about $2.2 billion, or $58 a share.
Albemarle (ALB) closed up by more than +5% after HSBC upgraded the stock to buy from hold with a price target of $200.
Intel (INTC) closed up more than +3% after Seaport Global Securities upgraded the stock to buy from neutral with a price target of $65.
Brinker International (EAT) closed up more than +1% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $200.
Earnings Reports(1/21/2026)
Charles Schwab Corp/The (SCHW), Citizens Financial Group Inc (CFG), Halliburton Co (HAL), Johnson & Johnson (JNJ), Kinder Morgan Inc (KMI), Prologis Inc (PLD), TE Connectivity PLC (TEL), Teledyne Technologies Inc (TDY), Travelers Cos Inc/The (TRV), Truist Financial Corp (TFC).
On the date of publication, Rich Asplund 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)
