Why Oklo Stock Sank Today

Shares of Oklo Inc (NYSE: OKLO) fell on Tuesday, finishing the day down 5.3%. The drop came as the S&P 500 and the Nasdaq Composite both had their worst day in months, sliding 2.1% and 2.4%, respectively.

Oklo, which is developing small modular reactors (SMRs), saw its stock decline along with most of the market as investors react to President Trump's attempts to gain control of Greenland.

President Trump threatens tariffs

The President threatened to increase tariffs -- 10% starting Feb. 1, rising to 25% by June -- on the U.K. and seven EU allies, unless they support his push to acquire Greenland, an independent territory of Denmark. Beyond equities, Treasury yields spiked, and the dollar weakened amid the escalating rhetoric.

Image source: Getty Images.

The so-called "sell-America" trade has returned, according to some analysts like Ian Lyngen, head of U.S. rates strategy at BMO, who said that "the weakness in U.S. equities and Treasuries following Trump's Greenland rhetoric points toward a return of the 'sell U.S. assets' sentiment," though Lyngen believes this will be short-lived.

Oklo can't afford a major slowdown

Oklo's fate is heavily tied to the health of the broader economy. A trade war with Europe could lead to demand for Oklo's reactors to slow down -- or at least its access to capital. Developing and building nuclear reactors, even SMRs, is extremely expensive and will require significant financing.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.