Hold tight and brace for another week that will test investors’ nerves as President Donald Trump’s drive to acquire Greenland threatens market chaos. But there are several promising factors that could bolster hopes of an orderly resolution.
First and most important is that Trump’s tariff threat, designed to push European countries into letting the U.S. acquire the Danish territory, could soon be taken off the table. A Supreme Court decision on the
legality of using the International Emergency Economic Powers Act (IEEPA) to impose levies could come as early as this week and the betting is it will go against the White House. While the president hasn’t indicated what authority he would invoke to implement Greenland-related tariffs, the IEEPA has been Trump’s tool of choice so far.
Second, there is significant domestic political opposition to the acquisition, which pits the U.S. directly against its NATO allies and threatens the future of the alliance—including from Republican lawmakers and voters. About 70% of U.S. adults are against using federal funds to acquire Greenland and 86% are against using military force, according to a recent poll conducted by CBS News and YouGov. Those figures could become more pronounced amid the pain from a trade war—a recent study found either American companies or consumers shouldered 96% of tariff costs in 2024 and 2025.
Finally, European leaders appear more determined to resist Trump’s threats than before. They have some leverage in the form of a suspension of the previously agreed U.S.-European Union trade deal and the EU is considering a package of $109 billion retaliatory or “anti-coercion” measures on selected American goods and services. While the U.S. has the option of withdrawing military aid for Ukraine, that comes with its own domestic political complications as Trump would have to justify the perception of empowering Russia.
It’s tough for the market to price unprecedented political risks such as the breakdown of NATO or a full-on trade war between the U.S. and Europe. But so far the smart money when it comes to Trump’s tariff proposals has been betting on some sort of compromise.
—Adam Clark
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World Leaders Convene in Davos Amid Trump’s Greenland Escalation
Global stock markets swooned on Monday in reaction to President
Donald Trump’s threats to annex Greenland, after lawmakers in the U.S. and in Europe also weighed in. Denmark sent more troops to the Arctic island, which is its territory, and European leaders were considering options as they pushed back at the threats.
- Over the weekend, Trump said he would put 10% tariffs on imports from eight European allies and later raise those to 25% unless a deal were reached for U.S. control of Greenland. European leaders pledged solidarity with Denmark and Greenland as the world convenes at the World Economic Forum in Davos.
- António Costa, the president of the European Council, is calling together an extraordinary meeting of the group in the coming days after
spending Sunday consulting with member states. The European Council helps set the European Union’s political direction. U.K. Prime Minister Keir Starmer called the threats “completely wrong.”
- Trump told Norway’s Prime Minister Jonas Gahr Støre that part of his reason for pushing so hard was that he wasn’t awarded the Nobel Peace Prize. Before that text was widely circulated Monday, Trump had previously insisted the U.S. needed Greenland as a matter of national security.
- Italy’s Prime Minister Giorgia Meloni said there might have been a misunderstanding about what European nations were
doing in response to Trump’s Greenland rhetoric, as several nations moved troops to the island. She called the threatened tariffs a “mistake” and said European moves weren’t taken against the U.S.
What’s Next: Nearly 3,000 government, business, and civic leaders from 130 countries are at the annual conference in Davos, with this year’s theme being “A Spirit of Dialogue.” Trump is expected to speak to the gathering on Wednesday.
—Liz Moyer and Janet H. Cho
Netflix Reports Earnings Amid Fight Over Warner Bros. Discovery
Netflix will report its fourth-quarter earnings and its 2026 guidance this afternoon, as it weighs revising its bid for Warner Bros. Discovery to an all-cash offer as a way to fend off a rival,
but hostile, offer for all of Warner Bros. Discovery from Paramount Skydance.
- Goldman Sachs analyst Eric Sheridan says Netflix is expected to
report a solid end to 2025 as management executes on core strategies, including offering original content to drive user engagement and growth and building out its live entertainment and gaming businesses.
- But investors will also be listening for any updates on the deal. Netflix last month agreed to buy Warner Bros.’s
studios and HBO Max streaming assets for $27.75 a share—$23.25 in cash, with the balance in Netflix stock, spinning off Warner’s Discovery Global cable business. Paramount has offered $30 a share in cash.
- Paramount has made several competing offers, which Warner has told shareholders to reject. President Trump said last month that Netflix’s buying Warner Bros. “could be a problem,” and that he’ll “be involved” in the regulatory approval needed to approve the merger.
- Trump bought up to $2 million of Netflix and Warner Bros. Discovery bonds in mid-December, days after Netflix agreed to buy Warner’s studios and streaming business for $72 billion, The Wall Street Journal reported, citing White House disclosures. The administration didn’t say whether the trades were executed on Trump’s behalf.
What’s Next: Netflix will host a live interview with Co-CEOs Ted Sarandos and Greg Peters, CFO Spence Neumann, and VP, Finance/IR and Corporate Development Spencer Wang. Analysts expect Netflix to report earnings of 57 cents a share on $11.97 billion in revenue, and 330.5 million subscribers, according to FactSet.
—Janet H. Cho and George Glover
Fed Independence at Stake in Supreme Court Hearing This Week
The Supreme Court hears
