Greenland is another headline that stocks can get past, investors say. What to do next
Greenland is just the latest geopolitical headline that the stock market can get past, when all is said and done, investors say. Stocks tumbled Tuesday, after President Donald Trump ramped up his rhetoric against those European countries opposing the sale of Greenland to the U.S. The Dow Jones Industrial Average dropped 870 points, while the S & P 500 slid 2% in its worst day since October. The Nasdaq Composite also fell more than 2%. Also key to the stock market rout was the move to record highs in Japan’s 40-year government bond yield, a development that helped trigger a global selloff in bond markets. Yet the overwhelming consensus on the Street is that investors can use the pullback as a buying opportunity, given that the startling headlines — around Venezuela, around Federal Reserve Chair Jerome Powell, around limits to credit card interest rates — do little to dim the actual bull case for stocks. “If you’re a medium to longer term investor, probably this is a pretty healthy buying opportunity, because the tailwinds of this economy are completely unaffected by the goings on of the past weekend,” said Scott Ladner, investment chief at Horizon Investments. That’s not to say that investors don’t expect more choppiness over the near term, given that a stock market that’s come into 2026 with lofty valuations is vulnerable to more negative headlines out of the White House. But any pullback is expected to pave the way for more upside later this year, investors said. Not only is the S & P 500 expected to post double-digit earnings growth, of 12% to 15%, the path for interest rates is lower, and the economic outlook is holding firm. The most recent estimate for real GDP growth in the fourth quarter of 2025 was 5.3%, a number that suggests the U.S. economy is actually running hot. On top of that, there’s fiscal stimulus expected from the One, Big, Beautiful Bill Act. And, the Trump administration is likely to take care to appeal to lower-income voters with an emphasis on affordability during a midterm election year. “This is the time to kind of just have that shopping list,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute. Samana said he’s betting on the U.S. economy, with a preference for the large- and mid-cap asset class, and especially within financials, industrials and utilities. He’s a little more cautious on consumer discretionary and consumer staples stocks when the lower-end consumer is struggling. Similarly, Horizon Investments’ Ladner expects the dip could be an opportunity to add exposure to cyclical stocks, as well as the equal-weighted market index. Year to date, the S & P 500 Equal Weighted Index is higher by more than 2%, while the market cap weighted index is negative. “Recent history has shown that you look pretty good kind of stepping in when others are kind of stepping back,” said Samana. To be sure, risks remain. The rise in bond yields merit a watchful eye, though investors expect they will not weigh on equities so long as they do not get to prohibitive levels, Wells Fargo Investment Institute’s Samana said. Meanwhile, what happens between the U.S. and Europe over Greenland will also be watched closely be investors, though, here, too, investors are soothed by Trump’s propensity to back down from threats. Chris Verrone, chief market strategist at Strategas, said he expects 6,500 will be the furthest the S & P 500 could fall from here, roughly a 4% drawdown from Tuesday’s close. “I’m inclined to buy it, because the setup into this was quite good,” Verrone told CNBC’s “Money Movers” on Tuesday.
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