Here is Schwab's early look at the markets for Wednesday, January 21:

Earnings season has taken a back seat this week after President Trump threated additional tariffs on European allies over the long weekend if they oppose the sale of Greenland to the United States. All three major U.S. market indices tumbled on Tuesday as investor sentiment was shaken by the geopolitical tensions.

"Risk appetite is waning, and the '“sell America trade'” is picking up momentum," said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, or SCFR. "The sell-off isn’t confined to U.S. markets—European/Asian markets also weak as traders fret over possible trade retaliation and broader geopolitical headwinds tied to diplomatic tensions."

Treasuries also sold off after several European Union countries threatened to suspend previously agreed upon trade deals and the Danish pension operator AkademikerPension revealed plans to exit its roughly $100 million Treasury position by the end of the month. The move underscored concerns about demand for U.S. debt amid rising trade tensions.

While markets were rattled by the Greenland-related spat on Tuesday, the longer-term impact of the latest geopolitical and trade drama is still up in the air.

"We need more details. We have seen many tariff threats recently, with not all of them being carried out," said Kevin Gordon, head of macro research and strategy at SCFR. "That’s not to say that the Greenland developments don’t matter. If the proposed tariff increases on our EU partners do kick in, that would be a fairly dramatic escalation in the trade dispute with the EU. We just find ourselves in a position of having limited information at this point. So does the market, which makes the reaction difficult to extrapolate."

With trade tensions rising, investors will be closely watching a looming U.S. Supreme Court decision on whether the executive branch can legally impose sweeping tariffs under the International Emergency Economic Powers Act. If the Supreme Court limits the executive branch's ability to enact tariffs, it could force the government to refund billions in tariffs. "That has the potential to add another kink in the process of assessing what the state of trade policy will look like moving forward," said Gordon.

While geopolitical tensions have taken center stage, earnings season rolls on today, with Johnson & Johnson the highlight. Investors will be closely watching the company's guidance and its MedTech and Pharma segment performance, as well as any updates on the legal overhang of talc-related litigation.

Earnings from the real estate logistics provider Prologis, the energy infrastructure giant Kinder Morgan, and the oilfield services company Halliburton will also be in focus. Additionally, investors will have a packed slate of financial services and regional bank earnings to monitor today from companies including Truist Financial Corporation, Citizens Financial Group, and Ally Financial.

Later in the week, investors will be focused on earnings from GE Aerospace, Proctor & Gamble, Abbot Laboratories, and Intel.

Shifting focus to market action on Tuesday, while stocks plunged, gold prices surged as investors sought traditional safe-haven assets. The Treasury yield curve also steepened significantly amid the escalating tensions between the U.S. and the EU.  "Longer-term yields could remain elevated in the near-term," said Cooper Howard, director of fixed income strategy at SCFR, noting that a higher term-premium, geopolitical concerns, and elevated inflation are all playing a role in propping up yields.

After dropping to their lowest level in over a year last week due to President Trump's decision to direct mortgage giants Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities, mortgage rates also rebounded on Tuesday, mirroring the move higher in longer-term Treasurys. The national average for a 30-year fixed-rate mortgage hit 6.19%, according to Bankrate.

Meanwhile, the U.S. dollar index, which measures the dollar against a basket of six leading foreign currencies, sank 0.8% as most U.S. assets sold off.

Turning quickly to economic data, the ADP National Employment Report (NER) Pulse showed Tuesday that U.S. private employers added an average of 8,000 jobs per week for the four weeks ending December 27. That was down from the prior week's reading of 11,250 jobs added but showed the labor market was still in good shape as of the end of 2025.

Overseas, China's fourth quarter domestic product, or GDP, came in at just 4.5% on Monday, according to the country's National Bureau of Statistics. It was the slowest pace of growth seen in China in nearly three years. China's retail sales also missed estimates in December, rising just 0.9% year-over-year. And for the full year 2025, fixed-asset investment—which includes real estate—contracted 3.8%.

Looking further ahead, investors' attention will shift to U.S. GDP and inflation later this week, while the Federal Reserve's January meeting will be the highlight next week. Another rate cut seems unlikely at the moment. Futures priced in just 5% odds a Fed rate cut next week as of Tuesday afternoon, according to the CME FedWatch Tool. The chance of a March rate cut, however, rose slightly to 21.5%.

"Based on recent Fed commentary, elevated inflation, and a labor market that isn’t substantially falling apart, we would be shocked if they cut next week," Howard said. "We believe they will cut one to two times this year at a slow and methodical pace."

As far as individual market movers and notable earnings releases on Tuesday, 3M stock slid nearly 7% despite topping consensus earnings and revenue forecasts. The diversified industrial company, which is known for its safety gear as well as consumer brands like Post-it, was at least partially a victim of the broader market sell-off. However, it also reported weak demand in its consumer segment, with fourth quarter sales falling 1.2% year-over-year, and its 2026 adjusted earnings-per-share guidance coming in slightly below Wall Street's forecasts.

The software firm turned bitcoin Treasury company Strategy also saw its shares sink almost 8% on Tuesday as investors spooked by rising geopolitical tensions moved away from bitcoin to traditional safe-haven assets like precious metals.

On the other side of the ledger, shares of Sandisk continued to surge despite a broader tech sell-off. Investors have flocked to the computer hardware company predicting that the AI and data center boom will continue to provide demand for its computer memory solutions. By the close, the stock had gained roughly 9.5%.

D.R. Horton stock slipped almost 1.8% even as the company topped Wall Street's consensus earnings and revenue forecasts, although gross margins shrank to 11.6% from 14.6% a year ago. The homebuilder also warned that it expects home sales gross margins to shrink sequentially due to higher incentives offered to buyers.

Netflix stock dropped more than 4% after the company reported slightly better-than-expected fourth-quarter earnings and revenue but said first-quarter results were likely to fall short of estimates. And United Airlines announced fourth quarter earnings that easily topped analysts' estimates, while revenue was in line with expectations. Shares of the airline were roughly 2% higher in post-market activity.

From a sector perspective, information technology led the market's slide on Tuesday as long-dated Treasury yields rose. The energy sector, which has surged since last April amid rising AI data center power demand, led the pack. Mostly defensive sectors, including utilities and health care, also outperformed as investors took a risk-off approach amid Greenland-related tariff tensions.

The Dow Jones Industrial Average® ($DJI) lost 870.74 points Tuesday (1.76%) to 48,488.59; the S&P 500 index (SPX) dropped 143.15 points (2.06%) to 6,796.86, and the Nasdaq Composite® ($COMP) shed 561.07 points (2.39%) to 22,954.32.