It almost feels like a déjà vu.

Trump makes a ridiculous claim. Everyone freaks out. The news talks about it all day. The market does not like it either. Then they course-correct and start talking about more realistic deals. We have seen this pattern a few times now. Let’s if this time turns out differently.

This time Trump announced new tariffs on the EU and confirmed his top strategic priority: the acquisition of Greenland.

The reason Greenland matters so much to the US comes down to two things.

First, it is one of the best spots on Earth for missile defense. Any intercontinental missile launched from Russia or China toward the US would fly over or very close to Greenland. That path also lines up with the missile’s highest point in flight, called the apogee. At that moment, the missile is moving at its slowest speed, which makes it the easiest time to intercept.

Think of throwing a ball straight up. At the top, it almost stops before falling back down. The same principle applies here. On top of that, intercepting a missile from directly below gives you an advantage, because the interceptor travels the shortest possible path. This means the missile has less time to detect and react. Below is a graphic from the Wall Street Journal showing this.

Second, Greenland is also a strong location for offensive missile systems. From there, the US could directly threaten targets in Russia or China with shorter response times.

Greenland has about 1.5 million metric tons of rare earth reserves.

This makes it the 8th largest holder in the world. But even with all that, Greenland has almost no rare earth production because of regulations, funding, and infrastructure.

Altogether, it has up to $5 trillion in natural resources.

That is around 20% of US GDP, and most of it is still untouched.

The problem with all of that is that it’s not clear whether it’s a bluff or if he’s actually serious. But his plan to acquire Greenland is certainly a bigger ask than China simply turning down some export controls. That, in turn, creates a huge amount of uncertainty and very bad downside potential. And if there is 1 thing the market hates, it’s uncertainty. It makes it more vulnerable and more sensitive to headlines.

As noted in the Weekly Market Updates, we were expecting volatility, but as it often does, it comes in different and more unexpected ways than most think. That’s the market, especially in today’s world. You’ve got to be flexible enough to adjust to new conditions quickly and be comfortable with high levels of uncertainty.

Today, the market had its biggest down day since October, and both major indices have lost their key moving averages. So, if there is no clear resolution in sight, this might turn into a deeper correction. Even then, this correction will likely get bought, but nobody knows how long it will last or how deep it will go. Hence, for the time being, it makes sense to be on the cautious side.

On top of that, Netflix just reported earnings. Overall, earnings and revenue were fine, but guidance disappointed. Revenue and EPS were both below what analysts were hoping for. The stock is now down almost 5% after hours. This is not a good start to earnings season, and it could have a negative halo effect on the rest of the Mag 7.

The only bright side is that many small caps are holding up surprisingly well. And there are still strong sectors and stocks out there, even while the rest of the market has been sold down. For example:

• Chips: SkyWater ($SKYT), Intel ($INTC)

• Memory: Sandisk ($SNDK), Micron ($MU)

• Networking: AsteraLab ($ALAB)

• Cooling: Vertiv ($VRTV)

• Energy: Bloom Energy ($BE)

• Optics: Lumentum ($LITE), LightPath ($LTPH)

• Drones: Ondas ($ONDS), Red Cat ($RCAT)

• Uranium: Energy Fuels ($UUUU)

• Rare Earths: Hycroft ($HYMC), US Antimony ($UAMY)

At least that is somewhat promising. Tracking the sectors and stocks that refuse to go down, or in other words are still being bought during a correction, is one of the most important things you can do as an active investor. These names often become the next leaders once the market turns back up.

But for now, there is no reason to be overly aggressive. If there is no real sign of improvement, it makes sense to cut some risk and reduce market exposure. Cash is a position. Patience is a position. Let the market prove itself first. Until then, defense beats offense.