Markets Switch to "Risk-Off" Ahead of Trump at Davos

Tuesday, January 20th, 2026

Major market indexes began the initial trading session of this holiday-shortened week today in negative territory, and slid lower from there. Off session lows by a whisker, the Dow shed -870 points, -1.76%, while the S&P 500 lost -43 points, -2.06%, and the tech-heavy Nasdaq dropped -561 points, -2.39%. The small-cap Russell 2000 was the relative outperformer, 32 points or -1.22%.

We appear to have switched to “risk off” upon President Trump’s fresh threats to slap new tariffs on European countries not in favor of the U.S. annexation of Greenland, which currently flies under its own flag by way of Denmark. Both the U.S. and Denmark are NATO allies, so this rift — while apparently just verbal at this stage — does have real-world consequences apparent, which are keeping investors with cooled heels.

Thus, despite a robust first two trading weeks of calendar 2026, the S&P 500 and Nasdaq have now dipped into the red year-to-date. We don’t see this as any particular reason for concern; in fact, if this becomes another tempest in a teapot, it may actually be a decent entry point, especially as economic reports and Q4 earnings reports depict a favorable economic environment overall. But the prudent move at this point is to wait and see what happens. We can start with President Trump’s appearance at Davos tomorrow.
 

Q4 Earnings After the Close: Netflix, United Airlines & More

Streaming leader Netflix NFLX posted better-than-expected results in its Q4 report after today’s closing bell. Earnings of 56 cents per share improved over estimates by a mere penny, while revenues of $12.05 billion inched above the $11.97 billion analysts were looking for. Earnings-wise, this is consistent with the average +1.2% beat per quarter over the previous four — one of which was a miss.

Why shares have fallen off a table nearly -5% directly following the Q4 release may have to do with next-quarter guidance: Netflix now expects earnings of 76 cents per share, a solid nickel below the Zacks consensus, with revenues now at $12.16 billion versus the $12.18 billion previously projected. The company no longer reports quarterly subscription numbers, though it did point out it has surpassed 325 million subscribers as of Q4 2025.

Keep in mind Netflix is usually pretty conservative with its guidance. Combine this with the ongoing wrangling over the assets of Warner Brothers Discovery WBD, which is still likely to wind up in Netflix’s hands but is still hotly contested by Paramount Skydance PSKY, whose hostile bid remains on the table. Netflix has suspended its share buyback program until the WBD issue is behind it. 

United Airlines UAL also outperformed expectations on both top and bottom lines this afternoon. Earnings of $3.10 per share bettered the $2.98 in the Zacks consensus, while $15.40 billion in revenues narrowly outpaced the $15.38 billion estimate. Revenue per Seat Mile came down -1.6% quarter over quarter, but International and Premium flights both grew +9% year over year. Shares are up +4.5% at this hour in late trading.

Interactive Brokers Group IBKR posted even more impressive beats on both earnings and revenues, with the automatic brokerage platform bringing in earnings of 65 cents on revenues of $1.67 billion, compared with expectations of 52 cents per share and $1.49 billion, respectively. Higher trading volumes and Net Interest Income helped the Zacks rank #2 (Buy)-rated company outperform in Q4.
 

What to Expect from the Stock Market Tomorrow

We’ll stay relatively quiet on the economic report front, with just a delayed Construction Spending update for October and up-to-date Pending Home Sales for December are anticipated a half hour after Wednesday’s opening bell. For earnings, Johnson & Johnson JNJ, Charles Schwab SCHW and Dow component The Travelers Companies TRV all are expected to deliver Q4 numbers ahead of the open.

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