NEW YORK, Jan 20, 2026, 07:09 EST
- U.S. stock index futures dropped to their lowest level in a month amid tariff threats linked to Greenland, rattling risk appetite
- Gold surged past $4,700, setting a new record as volatility indicators climbed
- Netflix grabbed attention again by updating its Warner Bros bid just ahead of Tuesday’s earnings report
Stock index futures tumbled to their lowest in a month on Tuesday as traders came back from a long weekend amid a global selloff sparked by President Donald Trump’s tariff threats over Greenland. By 5:32 a.m. ET, S&P 500 e-minis had dropped 1.61%, Nasdaq 100 e-minis fell 1.97%, and Dow e-minis slid 1.47%. Russ Mould, investment director at AJ Bell, warned, “If the crisis deepens it is unlikely to spell good news for global equities.” 1
The timing couldn’t be more challenging. As markets brace for a slew of earnings reports and economic data, the World Economic Forum kicks off in Davos, with U.S.-Europe relations suddenly back on the radar. Gold surged past $4,700 an ounce while the yield on the 10-year U.S. Treasury note climbed to 4.265%, marking a four-month peak. This came alongside a weaker dollar and a spike in the VIX, which hit its highest level of the year. 2
Some traders are betting on a familiar pattern, dubbing it the “TACO” trade—short for “Trump Always Chickens Out.” The idea: tariff threats lose steam, and risk assets bounce back. InvestingLive noted S&P 500 futures slipped below a key chart level near 6,865, with 6,770 eyed as the next support if selling continues. They also pointed to a potential Supreme Court ruling on Trump’s tariffs and his scheduled appearance at Davos on Wednesday as catalysts in the near term. 3
Europe took the first hit. On Monday, the STOXX 600 posted its largest single-day decline in two months, falling 1.2%. Luxury, auto, and tech shares were among the hardest hit. Andrew Kenningham, chief Europe economist at Capital Economics, said, “We doubt that (the tariffs) will be implemented as advertised,” suggesting the EU will likely proceed cautiously to avoid sparking further escalation. 4
The tariff threat sparked talk of a “Sell America” trade, pushing the dollar lower while the euro, sterling, and Scandinavian currencies gained ground and the Swiss franc surged. European policymakers are pondering retaliation—including tariffs and the EU’s anti-coercion instrument, which can limit access to public contracts and parts of the services sector. “… thinking about how they hold their assets,” said Francesca Fornasari, head of currency solutions at Insight Investment, highlighting Europe’s roughly $8 trillion in U.S. equities and bonds. 5
At Davos, European Commission President Ursula von der Leyen slammed the proposed extra tariffs as “a mistake” and cautioned about a “downward spiral” among allies. She emphasized, “A deal is a deal,” pointing to the U.S.-EU trade agreement inked last July. 6
U.S. Treasury Secretary Scott Bessent, speaking in Davos, warned Europe against any retaliation. “I think it would be very unwise,” he said when asked about possible countermeasures, urging governments to take Trump “at his word” regarding Greenland. 7
Broker XTB reported Nasdaq 100 futures slipping about 0.7% early in European trading. It flagged risks of higher taxes or penalties targeting U.S. tech firms in Europe if tensions drag on. The firm also highlighted Netflix earnings post-U.S. close, with the stock down nearly 30% from its highs this year and over 6% so far in 2026. According to XTB’s charts, the US100 index has broken lower, with the 23,350 level drawing traders’ attention. 8
Just before the bell, Netflix stepped in with a new twist. The company filed an amended all-cash bid for Warner Bros Discovery’s studio and streaming units, holding firm on the $82.7 billion price tag, according to a regulatory filing. This updated offer would pay shareholders $27.75 per share in cash, dropping the previous cash-and-stock combo. Warner Bros said the deal ensures “certainty of value and liquidity” at closing. 9
Morgan Stanley grew more cautious on North American IT hardware, cutting ratings on Logitech and NetApp, which slid 6.2% and 3.8% in premarket trading. The firm flagged a “perfect storm” brewing: slowing demand, rising input costs, and lofty valuations as customers tighten spending. Its survey revealed hardware budgets expanding just 1% in 2026 — the weakest non-pandemic figure in around 15 years. 10
GSK is set to acquire RAPT Therapeutics for $2.2 billion, offering $58 per share. RAPT’s stock climbed to around $57 in U.S. premarket trading. GSK Chief Scientific Officer Tony Wood highlighted the food allergy drug candidate Ozureprubart, saying it “addresses validated targets and clear unmet medical need.” The deal grants GSK global rights to the program, excluding mainland China, Macau, Taiwan, and Hong Kong. 11
In London, the FTSE 100 slipped roughly 1.1% in morning trading, marking its sharpest one-day drop since November. Exporters and drugmakers took the brunt of the losses. “What happens next for financial markets will ultimately depend on Trump’s actions in the coming days,” said Kathleen Brooks, research director at XTB. 12
A swift easing—or a legal blow to the tariff effort—might still spark a sudden relief rally, particularly in tech. Yet if the threats solidify into actual policy and Europe responds, traders will need to recalibrate growth and earnings rather than merely react to the news.
