The stock market had its worst session of the year so far as concerns of a potential trade war between the U.S. and EU sent the S&P 500 (-2.1%), Nasdaq Composite (-2.4%), and DJIA (-1.8%) sharply lower. The S&P 500 and Nasdaq Composite both closed below their respective 50-day moving averages and finished the session in negative year-to-date territory. 

Over the weekend, President Trump called for a 10% additional tariff on eight NATO members that oppose the U.S. acquisition of Greenland.  Bloomberg reported that the EU is considering retaliatory tariffs in response. In a press conference this afternoon, President Trump said he expects things to work out with NATO but doubled down on his stance that Greenland is essential for U.S. security. The president noted he has meetings scheduled with European leaders about Greenland, and he will speak at the World Economic Forum in Davos tomorrow. 

Stocks faced broad-based selling as a result of investors' geopolitical concerns, with a notable lack of any "buy the dip" interest keeping selling the major averages charting session lows through the close. 

Ten S&P 500 sectors moved lower, with seven finishing with losses of 1.0% or wider and six finishing with losses of 2.0% or wider.

The top-weighted information technology sector (-2.9%) was the day's worst performer. NVIDIA (NVDA 178.07, -8.16, -4.38%) was a mega-cap laggard, and Oracle (ORCL 179.97, -11.12, -5.82%) and Broadcom (AVGO 332.60, -19.11, -5.43%) finished with even wider losses. 

The PHLX Semiconductor Index (-1.7%) outperformed the broader sector as Intel (INTC 48.56, +1.60, +3.41%) moved higher after HSBC upgraded the stock to Hold from Reduce. Several memory storage names, such as Sandisk (SNDK 453.12, +39.50, +9.55%), also captured gains after a Micron (MU 365.00, +2.25, +0.62%) executive stated that the AI-driven memory shortage is unprecedented and expected to persist beyond 2026, according to Bloomberg.

The consumer discretionary sector (-2.8%) finished with a similar loss, with Tesla (TSLA 419.25, -18.25, -4.17%) and Amazon (AMZN 231.00, -8.12, -3.40%) also providing weak mega-cap leadership. The Vanguard Mega Cap Growth ETF closed 2.6% lower on the day. 

Elsewhere in the sector, lululemon athletica (LULU 188.76, -13.11, -6.49%) was a considerable laggard after the U.S. Supreme Court did not issue a ruling on the legality of President Trump's IEEPA tariffs today. 

On the earnings front, 3M (MMM 156.09, -11.71, -6.98%) weighed on the industrials sector (-2.0%) after the company beat earnings estimates but issued cautious guidance, while earnings beats from Fifth Third (FITB 50.12, +0.96, +1.95%) and U.S. Bancorp (USB 54.38, -0.02, -0.05%) did little to offset broader losses in the financials sector (-2.2%). 

Only the defensive consumer staples sector (+0.1%) escaped with a gain today.  A majority of the sector's components traded higher, though a loss in Walmart (WMT 118.71, -0.99, -0.83%) limited gains. 

Outside of the S&P 500, the Russell 2000 (-1.2%) and S&P Mid Cap 400 (-1.4%) outperformed the major averages yet again, though they too faced considerable losses. 

Meanwhile, gold futures settled $170.40 higher (+3.7%) at $4,765.80/oz, as investors piled into safe havens.  The CBOE Volatility Index surged 28.8% to 20.42, highlighting the unease across the market today. 

Today's sharp selloff leaves the market on fragile footing heading into the next session, with elevated volatility and technical damage likely to keep risk appetite restrained in the near term. Tomorrow is shaping up to be another potentially consequential day, as investors will hear from President Trump at the World Economic Forum in Davos and digest the November PCE Index (Briefing.com consensus 0.2%), both of which could influence trade-related sentiment and expectations for the policy outlook.

U.S. Treasuries had a mostly lower showing to begin the week, as longer tenors retreated considerably. The 2-year note yield finished unchanged at 3.60%, and the 10-year note yield settled up six basis points to 4.30%. 

There was no economic data of note today.

• Russell 2000: +6.6% YTD
• S&P Mid Cap 400: +4.6% YTD
• DJIA: +0.9% YTD
• S&P 500: -0.7% YTD
• Nasdaq Composite: -1.2% YTD