Market Summary: What Happened Yesterday and What Awaits us Today (January 21)

Trump's tariff escalation shakes Wall Street: Sharp losses for stocks and a record jump for gold amid market anticipation

U.S. financial markets suffered a sharp sell-off on Tuesday, with major indices closing deeply lower after a fresh political escalation from President Donald Trump reignited fears of renewed global trade tensions.

The decline followed Trump’s threat to impose additional tariffs on eight NATO allies after they opposed his proposal for the United States to purchase Greenland. The development unsettled investors, reviving concerns about the impact of trade disputes on global growth and corporate earnings.

The tech-heavy Nasdaq Composite plunged around 2.4%, while the S&P 500 fell 2.1%. The Dow Jones Industrial Average dropped nearly 1.8%, or roughly 870 points. The session marked the market’s first day of trading following the Martin Luther King Jr. Day holiday, which likely amplified volatility.

Markets reversed sharply after Trump announced on his Truth Social platform that the affected countries would face import tariffs of 10% beginning February 1, rising to 25% in early June, unless an agreement was reached on what he described as the “full and complete purchase” of Greenland.

Technology stocks led the losses, with members of the so-called “Big Seven” falling between 1.2% and 4.5%. Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta, and Tesla all declined, while Broadcom slid about 5.5%.

The sell-off came despite the sector’s dominant role in driving market gains over recent years through the artificial intelligence boom. However, renewed tariff risks raised concerns about supply-chain disruption and pressure on future profit margins.

In fixed income markets, the yield on the 10-year U.S. Treasury rose by around seven basis points to approximately 4.29%, increasing borrowing costs across the economy, including mortgages.

At the same time, investors rotated into defensive assets. Gold surged above $4,760 an ounce, while silver climbed to roughly $95.75, both reaching new record highs.

In digital assets, Bitcoin fell to around $89,500 after trading near $93,300 overnight. The U.S. dollar index dropped about 0.8% to 98.61, reflecting reduced demand for the currency amid rising uncertainty.

Oil prices moved higher, with West Texas Intermediate crude gaining roughly 1.8% to $60.55 a barrel, supported by a weaker dollar and expectations of improving demand.

On the corporate front, Netflix shares slipped more than 1% ahead of its earnings release after the close, following reports that Warner Bros. Discovery’s board approved an all-cash $27.75 billion offer to acquire its studios and HBO Max business. Warner shares fell 1.2%, while Paramount SkyDance, which is pursuing a rival takeover bid, declined 2.1%.

Following earnings announcements, shares of 3M dropped about 7%, while Fastenal fell roughly 2.5%.

Market Outlook

Markets are expected to remain volatile as investors monitor further statements from President Trump, particularly ahead of his meetings on the sidelines of the World Economic Forum in Davos. Attention will also remain on upcoming U.S. economic data and signals related to inflation and interest rates.

If trade rhetoric continues to escalate, technology stocks may face additional pressure, while gold and silver are likely to remain supported. Movements in the dollar and bond markets will continue to reflect the delicate balance between political risk and monetary policy expectations.