"Investors reacted emphatically to President Trump's insistence that he won't back down on his plan to take over Greenland: They hate it. The S&P 500 fell 2% yesterday, even though 81% of its companies have beaten their Q4 earnings expectations so far. The dollar fell off a cliff, losing nearly 1% of its value against a basket of foreign currencies. U.S. bond prices weakened modestly. Gold, the safe-haven investment, hit yet another new record high."
"The "sell America" trade is in full effect, in other words. S&P futures were up marginally this morning, suggesting that the bloodletting has been put on hold until traders hear what Trump has to say at the World Economic Forum in Davos later today. Trump offered a small ray of hope before he left for Switzerland when he told NewsNation, " We'll probably be able to work something out.""
"The drama has started a global debate about ending America's "primacy" as the place for investors to hold assets. Increasingly, analysts and economists are talking about hedging against U.S. risk and deploying their capital in markets which are more predictable. The fact that the S&P 500 underperformed last year compared to markets in Asia and Europe is helping make the case. It's a rerun in 2026, too. The S&P is down 0.71% year-to-date, while the Europe STOXX 600 is up 0.69% and the South Korean KOSPI is up an astonishing 14%."
President Trump's insistence on pursuing Greenland sparked sharp market reactions: the S&P 500 fell despite widespread earnings beats, the dollar slid nearly 1% against a currency basket, U.S. bonds weakened modestly, and gold hit record highs. Futures showed tentative stabilisation ahead of comments at the World Economic Forum in Davos. The episode intensified debate over America's investment primacy and prompted calls to hedge U.S. political risk by reallocating capital to more predictable markets. Recent performance gaps, with Europe and South Korea outperforming the S&P, reinforced arguments for diversification. Analysts warned political convulsions could trigger stagnation and further capital shifts.
Read at Fortune
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