The three-day weekend was a nice breather after jumping right back into the grind following the holidays. The downside? If you follow the markets closely, you probably spent the last few days sitting on the edge of your seat, wondering how stocks would open on Tuesday.
That concern was justified.
S&P 500 Index
This morning, both the S&P 500 and the Nasdaq 100 opened with sharp gaps lower—down more than 1.5% right out of the gate.
Before anyone panics, let’s put that move into perspective. The S&P 500 is still only about 2.5% below its all-time high, which was reached just last week. So by no means am I suggesting you make any rash decisions today - or even this week.
What’s Driving the Selling Pressure
Greenland.
Late last week, President Trump implemented new tariffs on several European countries in an effort to pressure them into backing a U.S. takeover of Greenland. This is a topic Trump has floated in the past, but last week marked the turning point where talk started to turn into action.
If you’re wondering why Greenland matters so much, it comes down to national security. The island sits on a massive base of critical natural resources that will be essential for innovation and economic power for decades to come.
On top of that, its strategic location is significant in the event of future conflict involving Russia or China.
Whether you agree with this strategy or not isn’t the point. What matters for investors is that this is what Trump believes - and at the moment, he doesn’t appear to be backing down.
We’ve Seen this Playbook Before
Trump often goes in big, applies maximum pressure, and then eventually dials things back to get a deal done.
This time may be different - taking over an independent allied territory is no small task - but I’ve learned not to underestimate how far he’s willing to push.
Back to the Investment Angle.
If this turns out to be classic Trump - go big, then walk it back - then the next week or two could present a very real buying opportunity. We’re already seeing certain areas of the market hold up well, particularly gold, silver, copper, and energy. In other words, commodities.
If you’ve been following my research over the past couple of years, you know I’ve consistently emphasized copper and the broader resources sector. This is exactly why diversification matters. When markets pull back across the board, having exposure to real assets can help cushion the downside.
Stay tuned this week as the Greenland story continues to unfold. I’ll keep you updated on how the market reacts - and if a true buying opportunity emerges, you’ll hear it here first.
Here’s to your future,
Matt McCall
Founder, NXT Wave Research
