Market Recap - Tuesday, January 20, 2026
US Stocks Tumble on Geopolitical Jitters and Rising Yields
US stocks sank today, posting their worst day since October. The S&P 500 dropped 2.06%, the Nasdaq slid 2.39%, and the Dow fell 1.76%, with all three major indexes ending just off session lows. The Russell 2000, which holds smaller companies, outperformed relatively but still closed down 1.21%. Pressure came largely from big tech stocks - Nvidia and Tesla each fell more than 4% - and a broad selloff in high-growth, high-momentum names. Retail, software, airlines, and cruise lines were among the hardest hit, while more defensive sectors like energy, consumer staples, and managed care managed to hold up. Gold surged to a record high and silver also rallied, while Bitcoin fell sharply. Oil climbed nearly 2% as geopolitical tensions shifted.
The selloff was driven by a mix of negative headlines. Over the weekend, Trump threatened new tariffs on eight European nations if Greenland isn’t sold to the US, with the EU weighing €93B in counter-tariffs. The situation is set to escalate with Trump’s Davos speech Wednesday and an emergency EU summit Thursday. Meanwhile, the global bond market saw more turmoil as Japanese yields spiked on election news and fiscal worries, sparking a selloff in US Treasuries. This pushed long-end yields to their highest levels since summer, fueling concerns that higher rates could undercut stock valuations. Economic data was sparse, but anticipation is building for inflation and GDP reports later this week, as well as more Q4 earnings.
Notable gainers included Rapt Therapeutics (+64%) after a buyout by GSK, and Acadia Healthcare (+21.9%) following a CEO shakeup. ImmunityBio (+17.4%) jumped on renewed FDA optimism, and Intel (+3.4%) rose on an analyst upgrade. On the downside, NetApp (-9.4%), 3M (-7%), and Logitech (-4.5%) declined on weak guidance or analyst downgrades.
Here’s Our Take
Markets took a hit today as geopolitical tensions and rising bond yields triggered a risk-off mood. Tariff threats between the US and Europe, uncertainty around Trump’s upcoming Davos speech, and concerns about Fed independence are all fueling investor anxiety. Meanwhile, the global selloff in bonds - driven by Japan’s political and fiscal developments - is pushing US yields higher, putting pressure on equity valuations. Add to that some disappointing earnings and you’ve got a perfect storm for a broad pullback.
Still, not all is negative. Energy and defensive names showed resilience, and there’s optimism around earnings season picking up steam later this week. The gold rally suggests growing demand for safety, while housing reform talks in Davos could bring relief to affordability concerns. But with volatility back on the rise, investors may need to brace for more choppiness as markets digest macro risks, central bank policy, and the trajectory of global trade. Staying diversified and quality-focused remains key in this environment.
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