Illustration: Lazaro Gamio/Axios

The U.S. stock market has seesawed in the new year, following a chaotic end to 2018 — its worst annual performance since the Great Recession and worst December performance since the Great Depression. The magnitude of recent swings suggests they are driven less by economic and market conditions than by geopolitical challenges.

Why it matters: Market actors focus, sometimes myopically, on technical indicators like “moving averages” or what the Fed will do on interest rates. But the current turbulence requires factoring in critical geopolitical trends like the rise of illiberalism in Europe, Trump administration trade policies, and China’s Belt and Road initiative.

Global geopolitical tensions are already impacting trade and business.

Together, these trends are eroding faith in pillars of global governance (NATO, UN, EU, WTO, and more) and social institutions, which contributes to market volatility and unpredictability.

Meanwhile, intensified polarization in the U.S. has led to standoffs like a partial government shutdown over a border wall dispute that threaten the economy and national security.

  • The economic power of the U.S. could decline as its debt and the associated costs mount, in the absence of effective congressional leadership.

Yes, but: In the U.S., some pillars of democracy — the federal judiciary, intelligence and law enforcement communities, a reinvigorated media, and grassroots political movements — have helped counter other risks.

The bottom line: These geopolitical trends erode trust, increase market volatility and dampen investment. If the U.S. pulls out of its current malaise, particularly after the 2020 elections, more effective governance could help correct the current course. It could also serve as an example to improve stability elsewhere, especially through international cooperation.

Andrea Bonime-Blanc is the founder and CEO of GEC Risk Advisory and author of the forthcoming book “Gloom to Boom: How Leaders Transform Risk into Resilience and Value.”

Go deeper

Updated 54 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 4:30 p.m. ET: 21,020,216 — Total deaths: 761,393— Total recoveries: 13,048,303Map.
  2. U.S.: Total confirmed cases as of 4:30 p.m. ET: 5,289,323 — Total deaths: 167,948 — Total recoveries: 1,774,648 — Total tests: 64,831,306Map.
  3. Health: CDC: Survivors of COVID-19 have up to three months of immunity Fauci believes normalcy will return by "the end of 2021" with vaccine — The pandemic's toll on mental health.
  4. Business: How small businesses got stiffed — Unemployment starts moving in the right direction.
  5. Cities: Coronavirus pandemic dims NYC's annual 9/11 Tribute in Light.
  6. Politics: Biden signals fall strategy with new ads.

Harris: "Women are going to be a priority" in Biden administration

Sen. Kamala Harris at an event in Wilmington, Del. Photo: Drew Angerer/Getty Images

In her first sit-down interview since being named Joe Biden's running mate, Sen. Kamala Harris talked about what she'll do to fight for women if elected VP, and how the Democrats are thinking about voter turnout strategies ahead of November.

What they're saying: "In a Biden-Harris administration women are going to be a priority, understanding that women have many priorities and all of them must be acknowledged," Harris told The 19th*'s Errin Haines-Whack.

Facebook goes after Apple

Illustration: Lazaro Gamio/Axios

Facebook is seeking to force a face-off with Apple over its 30% in-app purchase commission fee, which Facebook suggests hurts small businesses struggling to get by during the pandemic.

The big picture: Facebook has never publicly gone after Apple, a key strategic partner, this aggressively. Both companies face antitrust scrutiny, which in Apple's case has centered on the very fee structure Facebook is now attacking.