Wall Street rebounds after Trump backs off Greenland threats, reaches deal
Global News
The U.S. stock market bounced back from its worst day since October on Wednesday after President Donald Trump said he reached the framework for a deal about Greenland.
The U.S. stock market bounced back from its worst day since October on Wednesday after President Donald Trump said he reached the framework for a deal about Greenland, an island he’s long coveted, and won’t impose tariffs he had threatened on several European countries.
The S&P 500 rallied 1.2% after Trump said the deal, “if consummated, will be a great one for the United States of America” and its allies in the North Atlantic region. The announcement triggered an immediate move higher in the stock market, which found solace earlier in the day after Trump ratcheted down his rhetoric and told business and government leaders in Europe that he would not use force to take “the piece of ice.”
The de-escalation in tensions helped the S&P 500 recover just over half of its 2.1% drop from the day before and pull closer to its all-time high set earlier this month. The Dow Jones Industrial Average jumped 588 points, or 1.2%, and the Nasdaq composite climbed 1.2%.
The S&P/TSX composite index was up 101.25 points at 32,851.53, for a 0.3% gain.
Treasury yields also eased in the bond market in another signal of reduced worries among investors. Besides the progress on Greenland, they also got help from a calming of yields in Japan’s jumpy bond market. The value of the U.S. dollar, meanwhile, clawed back some of its declines against other currencies after sliding the day before.
Trump himself acknowledged how the U.S. stock market sold off on Tuesday because of his desire for Greenland, but he called it “peanuts compared to what it’s gone up” in the first year of his second term and said it would go up further in the future.
Trump has a history of making big threats that send financial markets sliding, only to pull back later and reach deals that are seen as less bad for the economy or for inflation than his initial suggestion.
On one hand, the pattern has given rise to the “TACO” acronym suggesting “Trump Always Chickens Out” if financial markets react strongly enough. On the other, Trump has ultimately struck deals that outsiders may have earlier considered unlikely, ones that he’s crowed about later. The most obvious example is Trump’s announcement of high tariffs on “Liberation Day,” which eventually led to trade deals with many of the world’s major economies.
