Trump, Tariffs and a Broken Market

The market has broken down technically. This is not a figure of speech, but a very specific state of charts and sentiment.

On January 21, 2026, the market was hit by several blows at once, which coincided in time and reinforced each other. Donald Trump’s tariff threats, discussions about Greenland, and the sharp return of geopolitics to the agenda achieved what macro statistics and corporate earnings had failed to do for a long time. Investors stopped looking at numbers and started fearing headlines again. Nasdaq and the S&P 500 fell below key technical levels that had held for months. This no longer looks like a normal correction or profit-taking after a rally. From a technical perspective, the market has sent a risk signal, not an opportunity signal.

It is important to understand that the market is now reacting not to company fundamentals, but to a sense of instability. When indices fall despite strong earnings and a functioning economy, it almost always means that money is leaving not because businesses have worsened, but because participants are unwilling to take risk. This is a classic risk-off regime, where fear matters more than logic.

Capital flows confirm this. While the technology sector and megacaps were declining, money moved relatively quickly into defensive assets. Gold and gold-related companies became clear beneficiaries of the situation. Shares of gold miners surged into market leadership, which historically almost always coincides with periods of heightened uncertainty. In such moments the market behaves predictably and even old-fashioned. It is not looking for growth, it is looking for shelter.

At the same time, the rally in gold looks strong but late. Such moves often occur when most of the fear has already been priced in, and prices reflect not the beginning of panic, but its peak. Entering defensive assets without pullbacks at this stage is dangerous. The market knows how to punish those who arrive too late, even if the underlying idea is correct.

A separate and far more troubling issue is the weakness of market leaders. Nvidia, Tesla and other flagship stocks that had been pulling indices higher for a long time now look tired and technically damaged. Until these names show signs of renewed strength, talking about sustainable market-wide growth makes little sense. History has repeatedly shown that markets can rise only when they have strong leaders. Without them, any rebounds remain local and short-lived.

The broader backdrop is also working against risk. Rising bond yields increase pressure on equities, especially growth companies where much of the valuation lies in future earnings. Investors are gradually reducing risky positions and prefer to wait. Ahead lie a speech by Trump and the release of inflation data, which is almost guaranteed to add volatility. The market dislikes uncertainty, and right now there is too much of it.

In such an environment, investor behavior also changes. This is not a market where one should rush after opportunities and fear missing out on gains. This is a market where the main task is to preserve what has already been earned. Protecting profits, paying closer attention to stops, holding cash and focusing on defensive sectors look far more reasonable than trying to catch a bottom in technology stocks. Rushing into tech purchases now looks more like playing against the market than following an investment strategy.

In the end, the picture is simple and unpleasant. At the moment, the market is not about making money, but about not losing it. And as experience shows, in such periods caution, not heroics, turns out to be the most profitable tactic.