S&P500: Stock Market Forecast Uncertain as Trump Greenland Tensions Drive Volatility

Group 1 - Investors are optimistic about avoiding military action in Greenland but do not expect a quick diplomatic resolution, with Trump threatening a 25% tariff on opposing European countries [1] - The market is experiencing volatility due to uncertainty, leading to liquidation selling and a "sell America" trade by Europeans protesting against Trump by divesting American assets [2] - The best-case scenario for the market is a rangebound trade, while the worst-case scenario could mirror the significant sell-off seen in April 2025, where the S&P 500 dropped about 10% in two days following tariff announcements [3] Group 2 - Investors are focused on remarks from business leaders at Davos, the Supreme Court's deliberations regarding Trump's actions against Fed Governor Lisa Cook, and the latest earnings reports [4] - Of the 33 S&P 500 companies that reported earnings, 84.8% exceeded analysts' profit estimates, significantly higher than the long-term average of 67.3% [4]