The stock market outlook for today points to a modest rebound attempt in pre-market trading following a sharp sell-off yesterday, driven primarily by renewed geopolitical tensions and tariff threats from President Trump regarding Greenland. This has spilled over into broader risk aversion, including a weaker dollar, higher Treasury yields (10-year around 4.29%), and pressure on growth/tech sectors. There are fears the EU will sell US assets to weaken the dollar. But people know Trump’s negotiating style (aggressive initial asks, potential de-escalation later), so panic selling may not be warranted long-term, people will buy the dip.
China has been selling US treasury bonds, if the EU also sell treasury bonds, yields in the US could go up and this would hit the stock market. Yields in Japan are still climbing which is another risk for the stock market. Right now it is not clear if stock markets have turned down or not. The 34-day BTI is still overbought, a multi-week decline is due.