Despite a public holiday in the US (Martin Luther King Jr Day), the US stock market is showing volatility this morning. As the S&P 500 index chart (US SPX 500 mini on FXOpen) indicates, trading on Monday opened with a sizeable bearish gap, driven by Donald Trump’s activity over the weekend.

According to media reports, the US president threatened to impose new tariffs on goods from eight European countries in order to force them to “fully and completely buy Greenland”. The proposed measures target Germany, the UK, France, Denmark, Norway, Sweden, the Netherlands and Finland. A 10% tariff is set to take effect on 1 February and would rise to 25% in June if no agreement is reached.

In response to the US threats, European leaders are considering suspending the ratification of last year’s trade agreement. Clearly, the market could not ignore such an escalation in international trade tensions.

Technical Analysis of the S&P 500 Chart

The decline in the S&P 500 (US SPX 500 mini on FXOpen) appears to confirm the bearish signals highlighted in the article S&P 500 Hits a Record – But Is Everything Really So Positive? published on 13 January.

As anticipated:
→ bears proved effective in defending the psychological 7,000-point level (with the price posting a false bullish breakout on the same day);
→ on 14 January, bulls confidently met the decline near the marked support at 6,888, after which the price moved higher.

At the same time, the previously identified ascending channel remains relevant. In this context:
→ the channel median acted as support on Friday;
→ today’s bearish gap has pushed the price down to the lower boundary of the channel (shown by the blue arrow).

The lower boundary has already demonstrated its strength as support in the first days of 2026. However, if geopolitical tensions and disappointing releases during the ongoing earnings season continue to fuel anxiety, bears may break through it and steer the S&P 500 onto a downward path that is becoming increasingly apparent.

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