Geopolitical Drama and Earnings Resilience: Markets Weather Tariff Threats in the Week of January 19-23, 2026

The week of January 19-23, 2026, underscored the stock market's capacity to absorb geopolitical shocks—from President Trump's tariff threats tied to a Greenland framework agreement to strong corporate earnings beats and a positive GDP surprise—resulting in only modest declines for major U.S. indices while select sectors and international equities advanced.

Key Takeaways

• U.S. Indices Modest Declines: S&P 500 down 0.4%, Dow Jones down 0.3-0.5%, Nasdaq down 0.1-0.7% amid early-week volatility.
• Sector Rotation: Energy (+3.2%) and Materials (+2.7%) led gains; Financials lagged (-2.5%).
• Earnings and Economy Strong: ~80% of S&P 500 reporters beat estimates; GDP surprised higher at 4.4% QoQ; PCE inflation in line.
• International Resilience: MSCI EAFE (developed international) rose ~1.41%, outperforming U.S. markets.
• Fixed Income Pressure: 10-year Treasury yield ended near 4.24-4.25%; bond prices faced headwinds.
• Oil Support: WTI crude rose, closing higher near $61/barrel, boosting energy.
• Top Performers/Losers: Biotech and semiconductors shone (e.g., Moderna +23.8%, Micron +18.7%); select consumer/healthcare names declined (e.g., Abbott -13%, AppLovin -13.6%).

US Equities: Modest Pullback but Quick Recovery from Early Losses

Our research team at Nexus Wealth Management observed that U.S. equities opened the week cautiously after the Martin Luther King Jr. Day holiday, with selling pressure intensifying mid-week due to geopolitical headlines. President Trump's announcement of potential 10-25% tariffs on several European nations—linked to negotiations over Greenland—triggered sharp declines on January 20 (S&P 500 and Nasdaq down over 2% intraday in some reports).

However, a framework agreement to resolve the issue quickly eased tensions, sparking rallies on January 21-22 (major indices up ~1.2% on the 21st). The week closed with the S&P 500 around 6,913 after a +0.6% gain on Friday, but overall fractional losses: S&P 500 -0.4%, Dow -0.3% to -0.5%, and Nasdaq -0.1% to -0.7%.

This resilience aligns with observations from peers like Edward Jones, highlighting how earnings momentum and economic data helped markets move past headlines.

International Equities: Developed Markets Outshine U.S.

In contrast to domestic indices, international developed markets demonstrated greater strength. The MSCI EAFE Index rose approximately 1.41% for the week, benefiting from the de-escalation of U.S.-Europe tariff concerns and broader risk appetite in overseas equities. Emerging markets showed mixed but generally stable performance amid the volatility.

As a local Missoula financial advisory team, our wealth management strategies at Nexus Wealth Management emphasize the value of global diversification in personal financial planning, particularly during periods of U.S.-centric geopolitical noise.

Fixed Income: Treasury Yields Remain Elevated, Pressuring Bond Prices

Fixed income markets faced modest headwinds as the 10-year Treasury yield finished the week near 4.24-4.25%, with reports indicating a slight net rise or stability amid resilient economic data and Fed expectations for steady rates (low probability of near-term cuts).

Investment-grade bonds generally underperformed high-yield in some contexts, though spread sectors held up better per analyses similar to those from Nuveen and BlackRock peers. Gold and precious metals attracted flows (gold +3%, silver +6% mid-week) as a safe-haven amid uncertainty.

For clients focused on 401k benchmarking and balanced portfolios, monitoring yield movements remains critical to adjusting duration exposure in wealth management plans.

Sector Spotlight: Energy and Materials Power Higher Amid Commodity Support

Energy surged +3.2% and Materials +2.7%, outperforming amid rising oil prices (WTI closing higher near $61/barrel) and broader commodity resilience tied to geopolitical supply concerns before de-escalation.

Financials lagged (-2.5%), potentially pressured by rising rates or sector-specific dynamics. This rotation away from mega-cap tech toward value and cyclical sectors signals broadening market participation, a positive development noted in peer commentary from firms like Vanguard and Invesco.

Standout Stocks: Winners in Biotech/Semiconductors, Losers in Select Consumer Names

Top performers included Moderna (MRNA +23.8%, perhaps vaccine or pipeline news), Micron Technology (MU +18.7%, AI/memory demand), Advanced Micro Devices (AMD +13.9%), and Gilead Sciences (GILD +12.1%).

Biggest losers featured Abbott Laboratories (ABT -13%), AppLovin (APP -13.6%), McCormick & Co. (MKC -11.5%), with additional pressure on names like Constellation Energy (CEG) and West Pharmaceutical (WST) around -15%. Intel faced notable weakness post-weak forecast, and reports highlighted DraftKings and AeroVironment among large-cap decliners.

These moves underscore earnings differentiation and sector-specific catalysts.

Market Drivers: Geopolitics Hurt Early, Fundamentals Helped Recovery

What hurt: Initial tariff/Greenland headlines, Intel's outlook miss, and profit-taking in overbought areas.

What helped: Strong earnings (80% beats, Q4 growth solid, 2026 outlooks positive ~15% EPS growth per consensus), GDP upside surprise, stable PMI/inflation (PCE in line), and rapid geopolitical resolution.

Broader leadership (small-caps, value) and commodity support added tailwinds. Our Nexus Wealth Management research team views this as evidence of underlying economic health supporting wealth management strategies.

Implications for Personal Financial Planning and Wealth Management

In periods of rotation and volatility, disciplined approaches like regular 401k benchmarking help ensure retirement accounts align with risk tolerance and goals. As a local Missoula financial advisory team, Nexus Wealth Management focuses on tailored personal financial planning that incorporates these insights—diversifying across domestic/international equities, fixed income, and alternatives while monitoring sector shifts.

About the Author
Robert Montes is the lead Portfolio Manager at Nexus Wealth Management. He is responsible for analyzing market conditions, assessing economic trends and developing wealth management strategies and recommendations that help investors work toward accomplishing their financial goals. Robert’s team works with over 700 households, managing 1100+ accounts and is one of the top rated wealth management firms in Montana. He is an avid Jiu Jitsu practitioner and former Army Ranger.

Full Video Transcript:

The market has hit record highs multiple times over the past 6 months, but are your accounts fully capturing the massive upside we've seen or has poor allocation sidelined your portfolio? I'm Robert Montez, Lead Portfolio Manager at Nexus Wealth Management, and today we're breaking down last week's market recap covering January Overall, last week was steady with some gentle pauses, reflecting normal digestion amid news flow. The S&P dipped. 4 percent, the Dow was down half a percent, and the Nasdaq remained roughly flat last week. As far as positive factors last week, these 3 things really stood out. first was receiving updated numbers on 2020 five's third quarter GDP, which was updated from 4.3 to 4.4 percent. This may seem like a small improvement, however, it reinforced the sentiment that the economy's underlying strength remains broad-based and durable. second was the quick recovery of markets after trade concerns settled regarding tariffs. Initially, there was some early worry about trade issues with President Trump's push to gain more control over Greenland, But the president softened his stance midweek, which led to tensions cooling. And this the stock market bounced back right away as people could focus on the strength of the economy instead of all the what ifs. This kept things from turning into a bigger drop and showed how fast talks and diplomacy can settle things down and impact the market. And third, tech stocks continued to show strength throughout the week, even as investors shifted from tech into other sectors. The ongoing focus on innovation, AI, and utilizing it along new technologies provided a helpful buffer for the broader market, which kept portfolios relatively stable. first was early week trade headline noise tied to Greenland discussions. This sparked some volatility, but the quick walk back in discussions kept impacts contained and short-lived. second, banks and a few other sectors saw some temporary pullbacks as money moved around to different parts of the market. Now, this type of rotation is totally normal and happens all the time. And as long as the broader economy remains strong, these areas usually recover and regain their footing without much delay. All in all, it's definitely nothing that changes the resilient trend we're seeing. And finally, some investors decided to take profits after those nice recent run-ups we've seen. While also a totally normal, healthy thing to see, it can push the market down in the short term. The key is that it didn't stop the forward momentum or change the solid, resilient, positive trends we've been seeing. So guys, that's what we saw last week in the market. What are your thoughts? Are things going to be all unicorns and rainbows in 20 26? Or are there major concerns you feel like no one is discussing? Either way, let me know in the comments. And if you want to hear our thoughts and what we see, make sure you tune in to our upcoming forward looking outlook, which we'll post on Wednesday. Thanks so much for watching. Please hit that like button as it helps the algorithms and allows us to reach and educate more people. Until Wednesday, have a great day.