HigherIQ — Wednesday, January 21, 2026

Good morning. It's Wednesday, January 21st, and welcome to your HigherIQ briefing. Today we're talking about a market meltdown that wiped out all of 2026's gains in a single session, why Anthropic's CEO thinks AI will replace most software engineers within the year, a Supreme Court case that could reshape who controls your mortgage rate, Netflix crossing 325 million subscribers while its stock still drops, and a surprising trend where the most digital generation in history is rushing to buy analog watches. Let's get into it.

If you checked your portfolio yesterday and felt your stomach drop, you're not alone. Tuesday was the worst day for stocks since October. The Dow fell 870 points. The S&P 500 dropped 2.1 percent, erasing every gain it had made this year. The Nasdaq tumbled 2.4 percent and is now negative for 2026. The VIX — that's Wall Street's fear gauge — spiked above 20 for the first time since November. The catalyst was Trump's escalating push to acquire Greenland. Over the weekend he announced tariffs of 10 percent on eight NATO countries starting February 1st, rising to 25 percent by June, unless a deal is reached to sell Greenland to the United States. When reporters asked Tuesday how far he'd go to get it, Trump answered quote, "You'll find out." But here's what made yesterday different from past tariff scares: investors didn't just sell stocks. They sold everything American. Treasury yields spiked to four-month highs. The dollar dropped sharply against major currencies. A Danish pension fund announced it would dump 100 million dollars in U.S. treasuries by month-end — an early signal that European money managers might use their capital to push back. And where did the money go? Gold. It broke above $4,800 an ounce for the first time ever. Silver continued its record run. The safe-haven trade that defined 2025 is accelerating into 2026. Now, this morning at Davos, Trump called for quote "immediate negotiations" on Greenland and suggested he wouldn't use military force, which pushed futures briefly higher. So the playbook that worked last year — some traders called it TACO, for "Trump Always Chickens Out" — is being stress-tested again. If you're fully invested in U.S. equities with no international diversification, yesterday was a reminder that geopolitical risk is back on the table.

Speaking of Davos, let's talk about what Anthropic CEO Dario Amodei said yesterday, because it should have every software engineer's attention. Amodei told the crowd that AI will be able to do quote "most, maybe all" of what software engineers do — end to end — within six to twelve months. And this isn't theoretical. He said some engineering leads at Anthropic don't write any code anymore. They prompt Claude Opus to write it, then review and guide the output. The human becomes the editor, not the author. He went further on labor disruption: half of junior white-collar jobs could disappear within one to five years. Google DeepMind CEO Demis Hassabis, who was on the same panel, offered a slightly more optimistic take — he expects slowdowns in internship hiring but believes AI tools will enable more skill creation than traditional career paths. Amodei also dropped this line: selling Nvidia's H200 chips to China, which Trump recently approved, is like quote "selling nuclear weapons to North Korea." Now, yesterday we covered how software stocks are getting crushed while the broader market held up. Today we have the CEO of one of the leading AI labs putting a specific timeline on the disruption. The question for anyone in tech isn't whether AI changes your job — it's whether you're positioned to work with these tools rather than compete against them.

This morning, the Supreme Court hears oral arguments on Trump's attempt to fire Federal Reserve Governor Lisa Cook. And Fed Chair Jerome Powell will be sitting in the audience. Here's the backstory: Trump tried to remove Cook last August, citing unproven allegations of mortgage fraud from before she joined the Fed. Cook denies any wrongdoing and hasn't been charged with a crime. Lower courts blocked the firing, saying the administration didn't satisfy the requirement that Fed governors can only be removed quote "for cause." Why does this matter beyond one board seat? No president has ever successfully fired a Fed governor in the central bank's 112-year history. If Trump wins, he'd have four of his appointees on the seven-member board — effectively giving him control over U.S. monetary policy. All three former living Fed chairs — Greenspan, Bernanke, and Yellen — signed a brief opposing Cook's removal, arguing the Fed was designed as a uniquely independent entity. The timing is pointed. The Justice Department is currently investigating Powell himself over the Fed's building renovation costs — which Powell has called a pretext for Trump's frustration over rates. Treasury Secretary Bessent said this week Trump has narrowed his Fed Chair candidates to four and may announce his pick next week. This is the most consequential Fed case in decades. A ruling for Trump wouldn't just affect Cook — it would rewrite the rules on presidential power over the institution that sets your mortgage rate, your car loan, and your savings returns.

Netflix reported earnings after Tuesday's close. The headline: 325 million global subscribers. Revenue of 12 billion dollars, beating estimates. Earnings per share slightly above expectations. And yet the stock dropped 6 percent in premarket trading this morning. Two reasons. First, Netflix upgraded its bid for Warner Bros. Discovery to 100 percent cash — 82.7 billion dollars total — signaling it's getting serious about the biggest media merger in years. Second, its 2026 revenue guidance came in right at expectations, not above them. This is part of a broader pattern this earnings season: Bloomberg data shows that while 81 percent of S&P 500 companies have beaten profit expectations so far, their shares have trailed the benchmark by an average of 1.1 percentage points — the worst relative performance since 2017. Beating estimates isn't enough anymore. The market wants upside surprises in the outlook, and Netflix didn't deliver one.

Alright, let's end with something a little different. Gen Z — the generation that grew up with smartphones in their hands — is nearly twice as likely as the general population to buy a luxury watch in the next 12 months. That's according to a Chrono24 and YouGov survey. Twenty percent of 18 to 24 year olds said they're likely or very likely to purchase one, compared to 11 percent overall. Cartier's share of purchases among this age group has quadrupled over seven years. The explanation goes deeper than status symbols. In a world of infinite scroll and constant notifications, an analog watch represents something this generation craves: a single-purpose device. It tells time. It doesn't track your data or send alerts or connect to the cloud. This is part of a broader analog revival — journaling, vinyl records, film cameras, print books. The irony: the generation that grew up digital-first is leading the charge back to physical objects. The companies winning with younger consumers are the ones offering presence over productivity, permanence over novelty.

A few quick hits before we go. Google is tightening parental controls. Kids as young as 13 can no longer opt out without permission, and YouTube added custom time limits on Shorts. The moves came after a viral post from a mom criticizing Google for encouraging her son to change his account settings. Translation: Big Tech sees the regulatory writing on the wall and is self-policing before governments do it for them. Also worth watching: that Danish pension fund divesting 100 million dollars from U.S. treasuries isn't huge in isolation, but it's the kind of early signal that matters. If European institutional investors decide to use their portfolios to push back on Greenland tariffs, the "Sell America" trade could have legs beyond a one-day tantrum.

On your calendar: today the Supreme Court hears the Lisa Cook case, and Trump continues meetings at Davos. Thursday brings an EU emergency summit on U.S. tariffs and the delayed PCE inflation data. Friday, Davos wraps up. Stay informed, stay curious, and we'll see you Thursday.