U.S. stocks jumped after President Donald Trump eased his stance on imposing tariffs in the dispute over Greenland, calming investor concerns over a potential transatlantic rift and a broader trade conflict.
On Wednesday in Davos, President Trump reversed course on plans to use tariffs as leverage in negotiations with Denmark over Greenland, signaling a willingness to pursue a diplomatic solution. The change followed weeks of combative rhetoric that unsettled financial markets and strained U.S. relations with European allies.
After meeting with NATO Secretary General Mark Rutte at the Davos gathering, Trump posted on his social media platform, stating that the U.S. and NATO had reached a framework for potential cooperation on Arctic security.
He added that further discussions on Greenland were focused on the Golden Dome missile defense initiative, a large-scale system that includes U.S. space-based weapons for the first time.
While Trump offered limited specifics, he indicated negotiations remained ongoing. One compromise being considered among NATO allies would see increased collaboration with the U.S. to expand its military infrastructure on Greenland.
At the World Economic Forum, President Trump acknowledged the unease his previous statements had caused in financial markets and ruled out the use of force regarding Greenland.
The policy shift triggered a rally on Wall Street, with the S&P 500 recording its largest single-day increase in two months, up 1.16%. Tuesday’s decline, fueled by Trump’s more forceful posture, had led to the sharpest drop in equities in three months.
