US Stocks Rebound Sharply on Greenland Deal Claim
US stocks surged on Wednesday (January 21st) after President Donald Trump canceled plans for new tariffs on Europe. Trump claimed there was already a framework agreement regarding Greenland, thus delaying the tariffs originally scheduled for February 1st. The market immediately took this as a signal that the risk of a trade war was easing—at least temporarily.
Before the post appeared, the stock market had already begun to rally after Trump also stated in Davos that the US would not use force to acquire Greenland. This statement eased fears of an extreme escalation that had caused investors to flee US assets in the previous session.
At the close, the Dow Jones Industrial Average jumped 588.64 points (+1.21%), the S&P 500 gained 1.16%, and the Nasdaq gained 1.18%. Despite the strong rebound, all three major indexes were still down for the week: the Dow was expected to lose 0.6%, while the S&P 500 and Nasdaq were still trending down around 1%.
Trump wrote that after a "very productive" meeting with NATO Secretary General Mark Rutte, he and relevant parties had established a framework for Greenland and the Arctic region. He later told CNBC that the US had a "draft agreement" with Greenland, though details were not yet disclosed.
The domino effect was also felt in the bond market. The "sell America" movement that pressured stocks and the dollar on Tuesday reversed course: 10-year Treasury notes rallied, lowering yields, while the US dollar also strengthened as risk appetite returned.
In the stock sector, technology led the recovery as investors returned to growth stocks abandoned earlier in the week, including big names like Nvidia and AMD. Bank stocks also rose after Trump mentioned plans to push for a 10% credit card interest rate cap, although the chances of passage remain uncertain. Citigroup and Capital One each rose about 1%.
Source: Newsmaker.id
