Nasdaq and Dow Jones set for small drop as Trump Davos speech awaited

• Tuesday's decline erased all 2025 gains for the Nasdaq and S&P 500, though the Dow, Russell 2000, and Equal-Weight S&P remain positive year-to-date
• The sell-off was driven by 'headline risk' surrounding Trump's tariff threats over Greenland rather than fundamental economic changes
• Market focus centers on Trump's Davos speech at 2pm European time, with investors hoping for a conciliatory tone rather than hawkish rhetoric that could further spook markets

Market Summary: US Futures Decline Ahead of Trump's Davos Speech

Market Movement:

US stock futures opened modestly lower on Wednesday, January 21, 2026, with Dow Jones and S&P 500 futures down 0.1% and Nasdaq futures declining 0.2%. This follows significant Tuesday losses where the Dow plunged 871 points (-1.8%) to 48,489, the S&P 500 fell 2.1% to 6,797, and the Nasdaq dropped 2.4% to 22,954. The declines erased all year-to-date gains for both the Nasdaq and S&P 500.

Key Driver:

Investor anxiety centers on President Trump's tariff threats regarding Greenland and his upcoming speech at the World Economic Forum in Davos, scheduled for 2pm European time. Trump's departure was delayed three hours, though he was reportedly en route to the Swiss resort.

Market Analysis:

SlateStone Wealth's Kenny Polcari characterized the selloff as "headline risk" rather than fundamental weakness, describing it as "rotation, not collapse." The Dow, Russell 2000, and Equal-Weight S&P remain in positive year-to-date territory.

Forex.com's Fawad Razaqzada noted that markets are hoping for conciliatory language from Trump: "If he does, that would almost certainly lift sentiment across markets. But if he doubles down on his hawkish rhetoric, then this could start to spook investors in a more meaningful way."

Additional Catalysts:

Wednesday's session includes economic data releases (Red Book, housing figures) and earnings reports from S&P 500 companies including Johnson & Johnson and Charles Schwab, though analysts expect Trump's speech to dominate market sentiment.

The market tone remains cautious as traders await clarity on administration trade policy.