Week Ahead: Trade War Risks Are Back—and Markets Are Pricing Them In

Key highlights:

1. Asian stocks fell, and Nasdaq/S&P 500 futures dropped 1% as renewed trade-war fears hit risk sentiment.
2. The MSCI Asia Pacific Index fell 0.5%, with most sectors lower, while futures pointed to further declines for US and European equities after recent steep losses.
3. Citigroup cut European equities to neutral, citing escalating US‑EU tensions and tariff uncertainty weighing on earnings, while upgrading Japan to overweight and favoring emerging markets for better risk‑reward.
4. Trump’s push to take control of Greenland, with threats of new tariffs on Europe, heightened market uncertainty.
5. The dollar stayed under pressure, 10-year U.S. yields hit a 4‑month high near 4.27%, and investors moved into safe havens like the Swiss franc and gold.
6. Gold hit a record high of $4,701.23/oz, up over 70% since Trump’s second term began, while silver eased after briefly reaching an all-time high of $94.72/oz.
7. Copper declined along with most base metals as investors assessed the risk of demand destruction in top consumer China following record-high prices.
8. Oil was steady as traders weighed fallout from the US push to take control of Greenland and looming US‑EU trade tensions ahead of Trump’s Davos speech, with expectations of a large crude surplus and escalating tariff risks pointing to further downside for prices.
9. Fed Chair Jerome Powell will attend Wednesday’s Supreme Court hearing on President Trump’s attempted dismissal of Governor Lisa Cook, a case that will shape the president’s power to fire Fed officials and the central bank’s independence in setting interest rates.

US stock futures fell early Tuesday (1:27 a.m. ET), with Dow -1.13%, S&P 500 -1.25%, and Nasdaq 100 -1.47%, as Trump’s escalation of trade tensions with Europe over Greenland revived tariff fears ahead of earnings season.

The slide came after Trump’s weekend announcement that the US will levy broad tariffs on imports from eight NATO countries unless they agree to talks on a “complete and total purchase of Greenland.” In response, European officials have floated up to $108 billion in retaliatory tariffs, with potential fallout estimated at around $8 trillion.

The tariff clash is unfolding against a critical legal backdrop, with the Supreme Court potentially ruling as soon as this week on whether Trump’s use of the International Emergency Economic Powers Act to impose tariffs is constitutional. Treasury Secretary Scott Bessent said Sunday he sees it as “very unlikely” that the court will overturn what he called the president’s signature economic policy.

US Economic data and Earnings Calendar:

Trump’s Davos speech on Wednesday is expected to center on housing affordability, with proposals such as banning large institutional homebuyers and directing Fannie Mae and Freddie Mac to buy more mortgage bonds to lower borrowing costs.

On Thursday, delayed PCE inflation data for October and November will be released, giving the Fed a key reading on price pressures before next week’s policy meeting, where officials remain split on further rate cuts.

Also, this week, the US Supreme Court will hear arguments in Fed Governor Lisa Cook’s challenge to President Trump’s attempt to remove her.

Economic calendar:

• Tue (Jan 20): No major data 
• Wed (Jan 21): Building Permits, Housing Starts, Construction Spending, MBA Mortgage Apps, Pending Home Sales
• Thu (Jan 22): Initial & Continuing Claims, Q3 GDP (3rd est.), PCE Prices, Personal Income & Spending, EIA Crude & Nat Gas Inventories 
• Fri (Jan 23): Univ. of Michigan Consumer Sentiment (final)

Earnings calendar:

• Tuesday, Jan. 20

Key Earnings: Netflix (NASDAQ:NFLX), 3M Company (NYSE:MMM), U.S. Bancorp (NYSE:USB), Fastenal (NASDAQ:FAST), DR Horton (NYSE:DHI), United Airlines (NASDAQ:UAL), Fifth Third Bancorp (NASDAQ:FITB), Interactive Brokers (NASDAQ:IBKR)

Netflix reports Q4 results late Tuesday, with Wall Street expecting EPS of $0.55 (up 28% y/y) on revenue of $11.97 billion (up 17%), helped by the final season of “Stranger Things” and other hit content. The stock has weakened this year amid its planned $72 billion bid for Warner Bros. Discovery, facing antitrust hurdles and a competing offer from Paramount Skydance, and has remained in a downtrend since July.

3M (MMM) reports Q4 on Tuesday after a 24% gain in 2025. Wall Street sees only single-digit sales and EPS growth for 2026. JPMorgan cut the stock to neutral Friday but kept a $182 target (about 8% upside). Shares sit in a seven-week flat base.

United Airlines (UAL) reports Tuesday, with estimates pointing to a third straight earnings decline and roughly 3% sales growth. Goldman Sachs reiterated a buy on Jan. 13 and raised its target to $129 (about 13% upside). Alaska Air (ALK) reports Friday.

Interactive Brokers (IBKR) reports Tuesday. Street forecasts call for 17% EPS growth and 15% revenue growth, below its recent four-quarter EPS pace of 27%.

• Wednesday, Jan. 21

Key Earnings: Johnson & Johnson (JNJ), Charles Schwab (SCHW), Truist Financial (TFC), Travelers (TRV), Halliburton (HAL), Citizens Financial Group (CFG)

Charles Schwab (NYSE:SCHW) posts full-year results Wednesday. Analysts look for revenue up 22% and earnings up 50%. The stock remains in a buy zone after a late-December breakout.

Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT)  report Q4 results early Wednesday and Thursday, respectively. Analysts expect J&J earnings up 22% on 7% sales growth, with focus on key drugs like Stelara and Darzalex. Abbott is in focus for its planned Exact Sciences (EXAS) acquisition, with forecasts calling for 12% EPS growth and an 8% revenue increase.

• Thursday, Jan. 22

Key Earnings: GE Aerospace (NYSE:GE), Procter & Gamble (NYSE:PG), Abbott Laboratories (ABT), Intel (NASDAQ:INTC), Intuitive Surgical (NASDAQ:ISRG), Capital One Financial (NYSE:COF), CSX (NASDAQ:CSX)

GE Aerospace reports Q4 on Thursday, with FactSet forecasting about 2% EPS growth on a 13% revenue gain after an 85% stock rally in 2025. Results are being driven by strong aftermarket demand amid prior Boeing/Airbus delivery delays, a large engine backlog, and a recent GEnx win with Delta’s 787 order. Shares sit in a flat-base buy zone following a late-December breakout.

Freeport-McMoran (NYSE:FCX) reports Q4 Thursday, followed by Alcoa (AA), with recent spikes in copper, aluminum and other metals putting supply and capital allocation in focus, per BMO. Analysts see FCX EPS down 8% and revenue down 7%, reflecting the Grasberg mine tragedy, while Alcoa is expected to post an 11% earnings decline and 6% sales drop amid higher aluminum tariffs from Canada. Both stocks have pulled back from recent highs but remain extended beyond buy zones.

Intel will report earnings after Thursday’s U.S. close as it races to cut costs and stabilize its finances amid tougher competition in PC and server CPUs and limited progress in AI chips. The company got a major boost last year when Nvidia, SoftBank and the U.S. government made sizable investments, including Nvidia’s $5 billion stake in December. Earlier this month, Intel unveiled a new AI laptop chip built on its next‑gen manufacturing process, aiming to ease investor concerns over its product roadmap.

Technical Analysis:

DJIA Index

1. The DJIA is still moving within the uptrend channel that started from August 2025 lows.
2. The index is currently trading around the middle of that channel.
3. Price has been range-bound between 49,670 and 48,790 since early this year.
4. A break above or below this range is likely to set the next direction.

DJIA Daily Candlestick Chart

Nasdaq 100 Index

1. The NDX continues to face resistance around 25,870–25,900.
2. While this ceiling holds, trading is likely to stay range-bound between 25,900 and 25,300, with extra support near 24,650.
3. A clear break below 25,300 would increase downside risk toward 24,650.
4. If 25,300 holds on repeated tests, expect continued choppy action between 25,900 and 25,300.

NDX Daily Candlestick Chart

SPX Index

1. SPX has held above the 6,880-resistance level since early January, turning it into a key support for further upside.
2. The index is currently trading within a 6,880–6,985 range.
3. Sideways trade within this band is likely this week as long as 6,880 continues to cap downside pressure.
4. A break below 6,880 would open the door to a deeper pullback toward 6,830.

SPX Daily Candlestick Chart

Weekly US Indices Probability Map:

• The US weekly market probability map for Jan 19 –23, 2026, suggests a Shorter week ahead with a mixed bias! 
• These probability maps are derived from historical seasonality patterns.
• The sentiment readings are driven by a seasonality-based scoring system.

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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.

He is the founder of TwT Learnings, provides financial market training.

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