Technology shares led the declines in U.S. stocks on Tuesday as investors reacted to escalating tariff rhetoric tied to President Donald Trump's renewed push around Greenland.
The State Street Technology Select Sector SPDR ETF (XLK) fell 2.2%. Nvidia, Meta Platforms and Google-parent Alphabet were all down around 2%. Apple and Microsoft shed more than 1% each, while Amazon and Tesla declines more than 2%.
Those moves put pressure on the broader market. Futures tied to the Nasdaq 100 were last down 1.8%. S&P 500 futures and Dow Jones Industrial Average futures were lower by 1.5% and 1.4%, respectively.
Markets were rattled after Trump threatened new tariffs on countries opposing the sale of Greenland to the United States, saying in a Truth Social post that levies could begin at 10% in February and rise to 25% by June. The president also floated steep tariffs on French goods and criticized European allies, fueling concerns about a wider trade escalation between the U.S. and European Union.
The renewed trade tensions come as global leaders gather at the World Economic Forum in Davos, Switzerland this week, with investors watching closely for signs that negotiations could cool tensions. But Wedbush analyst Dan Ives isn't overly concerned.
"Tech stocks will be hit as the 'risk off dynamic' hits AI names front and center but ultimately we view this as an opportunity to own the tech winners for 2026 and beyond," Ives wrote. "The back and forth war of words between Trump and the EU will give investors another opportunity to own the tech winners and despite the bears always trying to yell fire in a crowded theater......the AI Revolution is still in the early days of playing out and this soap opera this week is not changing that dynamic in our view as the 4th Industrial Revolution hits its next stage of growth in 2026."
Ives added that an upcoming catalyst could be a "robust" fourth-quarter earnings season expected from tech stalwarts over the next few weeks, with around $550 billion in capital expenditures fueling the next stage of the AI revolution.
He listed stocks such as Nvidia, Microsoft, Palantir, CrowdStrike, Nebius, Apple, Palo Alto, Google and Tesla as names he would buy amid current market weakness.