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“Remember, your mind is like a parachute: If it isn’t open, it doesn’t work. So keep an open mind!” – Buzz Aldrin
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
If this is the price we pay for a three-day weekend, maybe we should have kept the market open. It’s looking like a terrible Tuesday for US equities as the S&P 500 is poised to open down 1.4% while the Nasdaq is indicated 1.7% lower. Over the weekend, President Trump escalated his rhetoric towards Greenland and threatened tariffs on European allies if a deal isn’t reached. Today also marks the first anniversary of Trump’s second inauguration, and it’s been eventful to say the least.
Equity indices in Asia were weak, given the declines in US equity futures and the global trade tensions. The Nikkei was down over 1%, but India was the only other country down more than 1%. South Korea’s KOSPI declined 0.4%. Yes, you read that correctly- South Korean stocks had a daily decline for the first time in 2026. The more concerning aspect of the weakness in Asia, though, is in the bond markets where JGB yields are surging to multi-decade highs in their biggest one-day moves since the Liberation Day turmoil last April.
European stocks are much weaker this morning, and in early trading, the STOXX 600 is down 1.3%. Spain is leading the declines with a drop of 1.7%, followed by Germany (-1.6%), and Italy (-1.5%). The weakness this morning stems from President Trump’s announcement over the weekend that he would put tariffs of 10% on the imports of eight European countries beginning on 2/1, which will increase to 25% on 6/1, if no deal is reached on Greenland. Making matters worse are reports that the President will put 200% tariffs on imports of French wine if French President Macron refuses to join the Gaza Board of Peace.
Whenever we see large declines like the market is poised for this morning, it always helps to put the move in perspective. The chart below shows SPY’s performance during the current bull market, and the red dots indicate every other time that SPY gapped down at least 1%. While today’s occurrence is only the third in the last eight months, since October 2022, there have been 37 other occurrences, which works out to an average of once per month.
Today’s gap down in SPY comes as the market has been stuck in a holding pattern for the last several weeks. Based on pre-market trading, SPY is trading right now at the same levels it traded in back in late October.
