By Thierry Hasse, Chief Investment Officer
Elevage Partners | January 27, 2026
For U.S. investors wondering what “Greenland becoming part of the United States” would look like, Mother Nature offered a preview this past weekend. A major winter storm swept across much of the country, combining heavy snow, ice, sleet and Arctic cold into one of the largest winter systems in years. It stretched thousands of miles, from the Rockies and Southern Plains to the Northeast and New England, and served as a reminder that managing vast, frozen territories comes with challenges well beyond politics.
Greenland Headlines Trigger Market Anxiety
President Donald Trump has repeatedly framed Greenland as a strategic national security priority for the United States, arguing its location and resources are critical amid competition from Russia and China. Early in the dispute, he suggested the U.S. might seek to acquire or gain extensive control over Greenland, even linking European cooperation to that objective.
To pressure European governments opposing U.S. ambitions on Greenland, the administration threatened new tariffs on imports from eight countries: Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland. The proposed levies were expected to begin on Feb. 1 at 10% and potentially increase to 25% by June if no deal emerged.
European leaders reacted strongly, warning that tariffs against allied nations could undermine trade coordination and weaken broader transatlantic unity. In response, some EU bodies reportedly paused progress on broader trade discussions, serving as a reminder that political brinkmanship can quickly spill into economic consequences.
As the week progressed at the World Economic Forum in Davos, the president announced a “framework of a future deal” focusing on Greenland and the broader Arctic that had been discussed with NATO Secretary General Mark Rutte. Following that announcement, the administration paused the threatened tariffs, easing immediate fears of a trade escalation.
U.S. Stocks Post a Second Weekly Loss
Initially in the week, equity markets were roiled following the announcement of new tariffs on European nations. However, on Wednesday, equity markets recovered strongly once the White House backed off imposing those tariffs. This rebound is cited by equity traders as another instance of the “TACO” trade—a tongue-in-cheek trading theme that stands for “Trump Always Chickens Out”—when stocks recover rapidly from a sharp sell-off after the administration softens its harsh rhetoric on imposing tariffs. Regardless of the nickname, it reflects something real: headline risk can drive short-term market direction, often faster than fundamentals can reassert themselves.
By Friday, stocks finished slightly lower, and after the aggressive “sell America” tone early in the holiday-shortened week, many investors felt fortunate to have avoided a deeper drawdown.
Japan’s Bond Market Sends a Warning Signal
Meanwhile, on the other side of the world, global fixed income investors were closely watching Japan. Long-dated Japanese government bonds sold off sharply, pushing yields higher across the curve. Ten-year yields reached multi-decade highs, while ultra-long yields (30-year and 40-year maturities) moved rapidly higher.
The move followed heightened concerns about Japan’s fiscal path after the prime minister called a snap election. Investors viewed the timing as increasing the likelihood of continued fiscal expansion, which could widen deficits and add to Japan’s already enormous structural debt burden, now above 200% of GDP.
For U.S. investors, this matters because markets around the world are re-pricing the term premium (the additional yield demanded to hold longer-term bonds). Japan is a reminder that even without a central bank tightening cycle, long-term yields can rise when investors grow less confident that policymakers can “contain” the long end of the curve.
Last week, investors weren’t just reacting to price moves. They were trying to determine which risk mattered most: geopolitics, tariff-driven inflation concerns, weaker foreign demand for U.S. Treasuries, or the global repricing of long-term yields. The challenge wasn’t one dominant storyline, but several moving at the same time.
Corporate Earnings Take Center Stage in Days Ahead
Earnings should finally take the spotlight this week. Investors will review results from large tech companies, including Microsoft, Apple, Meta and Tesla, recognized as some of the biggest drivers of U.S. equity performance in recent years. Industrials and transport names like Caterpillar, UPS and American Airlines will offer real-time insights into demand, supply chains and capital spending. Starbucks, Mastercard and American Express may provide early signals on consumer strength or weakness.
Even if markets seem due for a “quieter” week, it’s worth remembering how quickly the story can change when a surprise headline hits. We’d welcome trading days with the spotlight on fundamentals—earnings, margin expansion and revenue growth, for example — but last week was a reminder of how geopolitics can steer sentiment just as quickly, and why attention to portfolio resilience remains warranted.
At Elevage Partners, we anticipate — we prepare.