Investors reacted emphatically to President Trump’s insistence that he won’t back down on his plan to take over Greenland: They hate it. The S&P 500 fell 2% yesterday, even though 81% of its companies have beaten their Q4 earnings expectations so far. The dollar fell off a cliff, losing nearly 1% of its value against a basket of foreign currencies. U.S. bond prices weakened modestly. Gold, the safe-haven investment, hit yet another new record high.
The “sell America” trade is in full effect, in other words. S&P futures were up marginally this morning, suggesting that the bloodletting was put on hold until Trump’s speech at the World Economic Forum meeting in Davos later today. Trump offered a small ray of hope before he left for Switzerland when he told NewsNation: “We’ll probably be able to work something out.”
The drama has started a global debate about ending America’s “primacy” as the place for investors to hold assets. Increasingly, analysts and economists are talking about hedging against U.S. risk and deploying their capital in markets that are more predictable. The fact that the S&P 500 underperformed last year compared with markets in Asia and Europe is helping make the case. It’s a rerun in 2026, too. The S&P is down 0.71% year to date, while the Europe STOXX 600 is up 0.69%, and the South Korean KOSPI is up an astonishing 14%.
“Until the U.S. no longer ‘threatens’ with the use of tariffs … the so-called primacy of the U.S. remains at risk of further dissolution, and with it an upending of the geopolitical alignments that have upheld markets in recent years,” Macquarie analysts Thierry Wizman and Gareth Berry wrote in a recent note to clients.
Their argument—perhaps one of the most extreme ones that Fortune has ever seen in an investment bank research note—is that when the U.S. goes through a major political convulsion, a period of stagnation follows, and thus investors should begin moving their money away from America:
