Investors could be confronted with an uncomfortable reality as the calendar flips to February: President Donald Trump’s efforts in January to exert control well beyond U.S. borders could mean that political risks routinely dominate markets in 2026.

Wall Street kicked off the new year under a barrage of geopolitical events that sparked sharp swings across financial markets. The U.S. dollar DXY sank to a four-year low, gold GC00 surged past $5,000, copper HG00 set a fresh record, oil prices CL00 CL.1 rose to six-month high and long-term Treasury bonds sold off.

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Stocks still managed to finish the month on a positive note, despite being hit by choppy trading throughout January.

“People do perceive the U.S. differently than they did a year ago — they are more nervous about the behavior of the president, the uncertainty about what is happening next regarding tariffs, relationships with our adversaries and the moving of the major battleships around the world,” said Todd Morgan, chairman at Bel Air Investment Advisors.

“I don’t remember this happening for decades, and it’s happening right now,” he told MarketWatch.

Trump blasted into 2026 with a military operation in Venezuela that captured the country’s then-leader, Nicolas Maduro. He briefly threatened new tariffs against European allies opposed to his Greenland plans, and he rattled the global oil market with new Iran warnings.

On Friday, even Trump’s nomination of Kevin Warsh to chair the Federal Reserve wasn’t enough to soothe shaky markets. That signals that geopolitical risks could be muscling their way into asset prices, potentially overshadowing positives from the economic cycle and corporate earnings.

“The market does not know how to price in geopolitical risks,” said Stephen Dover, chief market strategist at the Franklin Templeton Institute. “It has a very bad history of that.”

Yet Dover said some investors appear to be trying to find ways to make investment decisions based on geopolitics. For gold, that puts individual investors in good company with central banks, which already have been buying the precious metal for their reserves, he noted.

To be sure, past geopolitical events rarely triggered sustained market turmoil, unless they spilled over into a full-blown U.S. economic slowdown. That isn’t looking likely right now, but what makes this time different is that recent tensions have erupted between the U.S. and its longstanding allies, including Europe and Canada. That’s called into question the safe-haven appeal of dollar-denominated assets, including longer-dated securities in the $30 trillion U.S. Treasury market.

“Both non-U.S. and U.S. investors are reassessing and examining their expectations for the role that dollar assets play in their portfolios because of the higher level of policy uncertainty,” said Tony Rodriguez, head of fixed-income strategy at Nuveen. “U.S.-driven policy volatility has increased pretty dramatically in January, which therefore requires a larger risk premium on U.S. assets.”

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Policy uncertainty taking on a bigger role in the eyes of investors doesn’t mean that macroeconomic fundamentals — such as economic growth, business cycle and corporate earnings — no longer matter. They still do, and matter a great deal. Yet strength in the fourth-quarter earnings season and a resilient U.S. economy risk being eclipsed by actions from the White House.

“It’s been a challenging environment,” said Shannon Saccocia, chief investment officer of wealth at Neuberger Berman. “Normally, when you’re in the midst of an earnings season and earnings are delivering, that could provide some cushion against geopolitical tensions or policy questions, but you’re not getting that this period,” she told MarketWatch via phone on Thursday.

As of Friday, approximately 33% of S&P 500 companies have reported their earnings results for the fourth quarter of 2025. Among the companies that have reported, 75% delivered earnings per share that exceeded analysts’ estimates, modestly below both the five-year average of 78% and the 10-year average of 76%, according to John Butters, senior earnings analyst at FactSet.

U.S. stocks finished the week mostly lower as mixed earnings from some of the largest technology companies weighed on all three major indexes last week. The S&P 500 SPX rose 0.3% for the week, but the Dow Jones Industrial Average DJIA was off 0.4% and the tech-heavy Nasdaq Composite COMP dropped 0.2% for the period, according to FactSet data.

Notably, shares of Microsoft MSFT slumped nearly 8% last week after the company reported underwhelming growth in its cloud business and higher-than-expected expenses.

Looking ahead, tech earnings will remain in focus this week, as major AI-related companies including Palantir Technologies PLTR, Advanced Micro Devices AMD and Qualcomm QCOM are due to report their quarterly results throughout the week.

Google parent Alphabet GOOGL GOOG is scheduled to report on Wednesday, while Amazon.com AMZN reports on Thursday.

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