US equities dip on Trump's escalating Greenland tariff ultimatum to Europe

Nasdaq futures decline amid US trade tensions

United States (US) equity markets closed modestly lower on Friday, ahead of the Martin Luther King Jr. Day long weekend. The pullback was primarily driven by President Trump's comments indicating a preference to retain Kevin Hassett in his current role as director of the National Economic Council, rather than nominating him as the next Federal Reserve (Fed) chair. This development reduced expectations for a more dovish Fed leadership, triggering selling pressure in equities, a stronger US dollar, and elevated Treasury yields.

Nasdaq 100 futures are trading sharply lower this morning, down approximately 1.11% around the 25,400 level roughly 90 minutes after reopening. This follows President Trump's weekend threat to impose a 10% tariff on imports from several European allies, including Denmark, Norway, Sweden, France, Germany, the United Kingdom (UK), the Netherlands, and Finland –starting 1 February and escalating to 25% by 1 June – unless the US is permitted to purchase Greenland.

Geopolitical tensions and market implications

The announcement has heightened concerns over potential strain on the North Atlantic Treaty Organization (NATO) alliances and disruption to recent trade agreements with European nations, triggering renewed market volatility.

While there are hopes the US administration may eventually de-escalate these threats – as seen with certain prior tariff announcements – it is evident that securing Greenland remains a core national security objective for the current US administration. The push is framed as essential to counter Russian and Chinese influence in the Arctic, bolster US military presence, and secure strategic resources. As such, we believe the Trump administration's hawkish stance on this issue is unlikely to be walked back as readily as some other tariff threats.

Beyond ongoing headlines related to these geopolitical developments, key events this week include:

• Wednesday's confirmation hearing for Fed Governor Lisa Cook (where probability markets currently assign low odds of her dismissal in 2026)
• The long-awaited US Supreme Court ruling on the administration’s use of the International Emergency Economic Powers Act (IEEPA) for tariffs (potentially delayed until 20 February).

Upcoming court rulings and economic data releases

Consensus suggests that any invalidation of IEEPA tariffs would likely prompt a shift to alternative authorities (e.g., Sections 122, 232, or 301), resulting in limited macro impact – though potential implementation delays or refunds could temporarily elevate US Treasury term premia and pressure the US dollar.

Additionally, we are set to receive the Fed’s preferred measure of inflation, the core personal consumption expenditures (PCE) price index, along with S&P flash purchasing managers' index (PMI) data and earnings from Netflix, Johnson & Johnson, Procter & Gamble, and Intel.

Nasdaq 100 technical analysis

During the final weeks of 2025, we maintained an upside bias in the Nasdaq 100, supported by bullish seasonals and based on the corrective price action that played out from the 29 October, 26,182 high into the 21 November low of 23,854.

While this view has proved to be mostly correct as the Nasdaq last week hit its highest level since early November, it is noticeable that the Nasdaq 100 has thus far failed to break to new highs in 2026, despite both the S&P 500 and the Dow Jones doing so.

This leaves the Nasdaq 100 still needing to clear the 25,850 – 25,875 resistance area to open the way for a retest of the 26,182 record high before a potential move towards 27,000.

However, it is important to note that should the Nasdaq 100 cash first see a sustained fall below uptrend support at 25,500 – 25,400 and then through the 25,086 low of 2 January, it would create technical damage to the uptrend and raise concerns that a pullback initially towards 24,600 – 24,500, with scope to 24,000, is underway.

Nasdaq 100 daily candlestick chart

S&P 500 technical analysis

As noted above, both the S&P 500 and the Dow Jones hit fresh record highs in the early days of 2026. The S&P 500's high last week, at 6986, came just 14 points shy of our 7000 target.

Providing the S&P 500 remains above uptrend support at 6920, drawn from the November 6521 low, it may extend its gains towards the next upside target at 7100.

However, it is important to note that should the S&P 500 first see a sustained fall below support at 6920 and then see a sustained break of the 6824 low of 2 January, it would inflict technical damage to the uptrend and raise concerns that a pullback initially towards 6750 - 6720 is underway.

S&P 500 daily candlestick chart

• _{Source: TradingView. The figures stated are as of 19 January 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}