S&P 500 futures edge up, EUROSTOXX 50 declines, and Nikkei advances as AI resilience counters Greenland tariff fallout
Global stock markets entered the last week of January 2026 amidst geopolitical tensions and administrative unpredictability. However, the ongoing surge of the artificial intelligence supercycle provided essential support for equity valuations. On Monday, January 26, investors navigated a challenging landscape where the “Sell America” sentiment, sparked by the Greenland tariff dispute, contrasted with strong corporate earnings from the technology sector. While both the S&P 500 and Nasdaq Composite managed to achieve modest gains, the Dow Jones Industrial Average experienced a notable decline as the overall market assessed the fallout from a domestic investigation into the Federal Reserve leadership coupled with rising tensions in the Middle East.
Tech resilience buffers blue chip decline
In the United States, equity markets showcased a stark divergence that underscored the dominance of tech-focused indices. The S&P 500 rose by 0.03 percent to 6,915.61 points, reflecting a 14.79 percent increase over the past year. The Nasdaq 100 mirrored this upward trend, climbing 0.34 percent to 25,605 as investors continued to channel funds into high-growth AI companies like Nvidia and Microsoft, both of which recorded significant gains during the session. Conversely, the Dow Jones Industrial Average painted a different picture, falling 0.58 percent to close at 49,099. This decline in blue-chip industrials was primarily linked to renewed worries about a possible U.S. military intervention in Iran and a major winter storm affecting domestic supply chains. Analysts note that the market remains tense due to the ongoing inquiry into the Federal Reserve chair.
Geopolitical friction pressures European blue chips
In Europe, markets were acutely responsive to the ongoing “Greenland Gambit.” The Euro Stoxx 50, which tracks the region’s largest blue-chip companies, fell 0.13 percent to 5,948.21, retreating from its record highs earlier in January. This cautious sentiment followed President Trump’s recent comments suggesting that 25 percent tariffs might be imposed on European NATO allies by June 1 unless a Greenland purchase deal is secured. The diplomatic tensions have led European Union legislators to suspend several trade agreements, significantly affecting the industrial and manufacturing sectors of the DAX 40 and CAC 40 indices. Although the German DAX saw a slight increase of 0.18 percent to 24,901, the French CAC 40 remained largely unchanged, dropping 0.07 percent to end at 8,143. Eurozone investors are increasingly turning to the Swiss franc and government bonds, fearing that the “Liberation Day” tariffs of 2025 might signal a more permanent shift toward protectionism in U.S. trade policy.
Policy reforms and AI momentum steady Asian markets
In Asia, the focus was on cautious recovery and optimism fueled by policy initiatives. Japan’s Nikkei 225 index rose 0.29 percent to 53,847, remaining close to its all-time highs from earlier in the month. The Japanese market has benefitted from “Sanaenomics,” the reform policies of Prime Minister Sanae Takaichi, which have successfully released corporate cash reserves for increased wages and shareholder returns. Meanwhile, Chinese equities displayed signs of stabilization, with the Shanghai Composite increasing by 0.33 percent to 4,136. Despite a minor slowdown in annual GDP growth to 4.5 percent, emerging positive signals in the private sector and a resilient semiconductor export market have averted a more substantial selloff. The broader MSCI Asia-Pacific index, excluding Japan, remained stable as regional investors balanced concerns over Western tariffs with the positive momentum from a developing AI sector that continues to boost demand for Asian-produced hardware.
Commodities rally as investors seek safe havens
The commodity markets perhaps best reflected the day’s underlying concerns. Gold prices approached the historic $5,000 mark, trading at $4,987.66 as the “safe-haven” trade gained traction. Silver also saw a dramatic 7.06 percent surge to $102.94, marking one of its most volatile trading sessions of the year. Energy prices were also in flux, with Brent crude rising 2.84 percent to $65.88 per barrel amid worries of supply disruptions in the Middle East and the expected impact of the North American winter storm. These indicators suggest that while equity markets hold hope for a gentle economic landing, demand for hard assets is rising. As the Federal Reserve’s upcoming policy meeting approaches, the global financial community finds itself grappling with the dual prospects of technological growth and the unpredictable geopolitical landscape of 2026.
