On Jan. 20, 2026, Trump’s Greenland-linked tariff threats rattled megacap tech as geopolitics, not earnings, drove Wall Street’s pullback.
The S&P 500 (^GSPC 2.06%) fell 2.06% to 6,796.76, the Nasdaq Composite (^IXIC 2.39%) dropped 2.39% to 22,954.32, and the Dow Jones Industrial Average (^DJI 1.76%) lost 1.76%. (^DJI 1.76%) slid 1.76% to 48,488.58 as a “Sell America” trade and Greenland tariff fears triggered a global risk-off rout.
Market movers
Megacap tech led declines, with Nvidia (NVDA 4.42%) and Tesla (TSLA 4.17%) down 4.32% and 4.17%, respectively, among the weakest. Investors rotated out of high-multiple artificial intelligence (AI) and electric vehicle (EV) names.
What this means for investors
Over the long weekend, President Trump tied new potential tariffs to European countries opposed to his desire to purchase Greenland. Markets recoiled at the latest tariff threat.
The market reaction reminded investors how quickly geopolitical changes can affect markets, particularly riskier sectors with lofty valuations.
While the reaction was global, large U.S. tech and the “Magnificent Seven” led the path lower. Traders pulled the Nasdaq down to a two-week low. More defensive stocks and precious metals outperformed today, highlighting the “risk off” mindset.
Investors should keep things in perspective, however. Major U.S. markets realized double-digit gains in 2025 for the third consecutive year. And the tariff shock last April ended up being an excellent buying opportunity for investors.
Markets have also gotten off to a strong start in 2026. With earnings season upon us, long-term investors should now be watching for compelling entry points in high conviction names.
Howard Smith has positions in Nvidia and Tesla and has the following options: short February 2026 $170 calls on Nvidia. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy.