Investors are heading into a holiday-shortened week, with U.S. stock markets closed on Monday for Martin Luther King Jr. Day. Activity is expected to pick up quickly, however, as President Donald Trump’s latest tariff threats, two high-profile Supreme Court cases, and earnings from major companies such as Netflix (NASDAQ:NFLX) and Intel (NASDAQ:INTC) take center stage. Markets may also get more clarity on Trump’s housing affordability proposals, with November’s midterm elections drawing closer.
1. Europe weighs response to Trump’s Greenland tariffs
European leaders are expected to debate their response to Trump’s proposed tariffs later this week, amid reports that EU officials are considering strong countermeasures if the levies are enacted.
On Saturday, Trump said the U.S. would impose 10% tariffs on eight European countries — Denmark, Sweden, France, Germany, the Netherlands, Finland, Norway and the United Kingdom — until Washington is allowed to buy Greenland. He added that the tariffs would rise to 25% in June if the purchase of the semi-autonomous Danish territory does not go ahead.
Trump has framed the acquisition of Greenland as a national security necessity, while European governments have described the move as blackmail.
Ahead of an emergency summit scheduled for Thursday in Brussels, EU members are reportedly preparing to discuss several options, including tariffs on €93 billion worth of U.S. imports. Another possible response is the so-called “Anti-Coercion Tool,” which could restrict U.S. access to investment, banking services and trade in services.
Against this backdrop, analysts say uncertainty around Trump’s trade agenda — a recurring feature throughout 2025 — could intensify.
“If the past year has shown anything, it is that the macroeconomic effects of tariffs are both uncertain and non-linear,” said Neil Shearing, Group Chief Economist at Capital Economics, in a note.
Shearing expects the economic impact of the tariffs to be “modest,” cutting “a few tenths of a percentage point” from growth in affected economies while adding a similar amount to U.S. inflation. However, he warned that the political consequences could be “far greater,” adding that any U.S. attempt to take Greenland by force or coercion would cause “potentially irreparable damage” to NATO.
2. Supreme Court decisions draw attention
Trump’s latest tariff threat comes as the U.S. Supreme Court is expected to rule on the legality of his broad use of tariffs.
Markets broadly anticipate that the court will strike down Trump’s reliance on a 1970s-era international emergency economic powers law to impose the levies. Betting site Polymarket currently assigns only a 31% probability that the justices will rule in Trump’s favor.
While Trump’s advisers have suggested alternative legal routes to pursue tariffs, analysts note that this would only add further uncertainty to the outlook for trade policy, including the proposed Greenland-related duties.
Separately, the Supreme Court is scheduled on Wednesday to hear arguments in a case concerning Trump’s attempt to dismiss Federal Reserve Governor Lisa Cook. Cook sued Trump in August after he moved to remove her over alleged mortgage fraud, a step widely viewed as an attempt to weaken the Fed’s independence.
“[The Supreme Court] has been a relative friend of the Fed in terms of defending it from White House interference, and investors are hoping that remains the case during the Cook hearing,” analysts at Vital Knowledge said.
3. Netflix earnings in focus
On the corporate front, Netflix is set to release its quarterly results after the U.S. market close on Tuesday.
Bloomberg consensus estimates point to earnings per share of $0.55 on revenue of $11.96 billion. Still, attention is likely to center less on the headline numbers and more on Netflix’s reported interest in acquiring Warner Bros. Discovery, a bid that faces competition from Paramount Skydance.
The contest for Warner Bros. is expected to stretch on for months and could attract regulatory scrutiny in both the U.S. and Europe. Netflix has targeted Warner Bros., whose assets include HBO Max and franchises such as “Harry Potter” and “Friends”, as part of efforts to lift revenue growth. Despite success with shows like “Stranger Things” and moves into live sports, investors remain focused on whether Netflix can generate returns from heavy spending on advertising and video games.
4. Intel reports amid turnaround efforts
Intel is due to post its results after Wall Street closes on Thursday.
Under CEO Lip-Bu Tan, the chipmaker has been cutting costs and shoring up its balance sheet as competition intensifies in the PC and server processor markets. Efforts to gain traction in artificial intelligence chips have so far fallen short.
Last year, Intel received a significant boost when Nvidia (NASDAQ:NVDA), SoftBank (USOTC:SFTBY) and the U.S. government invested in the company. Nvidia, in particular, bought $5 billion worth of Intel shares in December.
Earlier this month, Intel also unveiled a new AI chip for laptops, aiming to reassure investors about products built on its next-generation manufacturing technology.
5. More detail expected on Trump’s housing plan
The Trump administration is expected to outline further details of its housing affordability agenda, a key issue for voters ahead of the midterm elections later this year.
High mortgage rates and elevated home prices have kept many Americans on the sidelines of the housing market. Last week, White House economic adviser Kevin Hassett said the administration plans to allow investors to use portions of their retirement savings for home down payments. He added that Trump “will put the final plan out” during his visit this week to the World Economic Forum in Davos.
Trump has also floated additional measures aimed at lowering housing costs, including restricting institutional investors from buying single-family homes, directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds, and imposing a cap on credit-card interest rates.