U.S. Stocks Extend Yesterday’s Rebound Amid Easing Greenland Tensions

Stocks moved mostly higher over the course of the trading day on Thursday, adding to the strong gains posted during Wednesday’s session. The major averages further offset the steep losses posted on Tuesday, with the Dow turning positive for the week.

The major averages ended the day well off their highs of the session but still firmly positive. The Dow climbed 306.78 points or 0.6 percent to 49,384.01, the Nasdaq advanced 211.20 points or 0.9 percent to 23,436.02 and the S&P 500 rose 37.73 points or 0.6 percent to 6,913.35.

The extended rebound on Wall Street came as stocks continued to benefit from easing tensions over President Donald Trump’s efforts to take control of Greenland.

Trump ruled out the use of military force to acquire Greenland during a speech on Wednesday and later said he had reached the “framework” of a deal on the arctic territory.

As a result of the “framework” of a deal reached with NATO Secretary General Mark Rutte, Trump pulled back from threats to impose sanctions on European countries that opposed his plans.

Some analysts see the strength on Wall Street as a return of the “TACO trade,” meaning “Trump Always Chickens Out,” as the president is often seen as backing down after scaring the markets with threats of new tariffs.

“There are a lot of similarities with the Liberation Day market wobble in April 2025 and now,” said Russ Mould, investment director at AJ Bell. “In both situations, Trump took an aggressive stance and then backed down after financial markets wobbled.”

He added, “The US president has a keen eye on what happens with bonds and stocks, and the last thing he wants is to be accused of destroying people’s wealth.”

In U.S. economic news, the Labor Department released a report on Thursday showing a slight uptick in first-time claims for U.S. unemployment benefits in the week ended January 17th.

The report said initial jobless claims crept up to 200,000, an increase of 1,000 from the previous week’s revised level of 199,000.

Economists had expected jobless claims to rise to 205,000 from the 198,000 originally reported for the previous month.

A separate report released by the Commerce Department showed consumer prices increased in line with economist estimates in the month of November.

Sector News

Gold stocks saw substantial strength on the day amid a sharp increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index spiking by 4.4 percent to a record closing high.

Significant strength was also visible among telecom stocks, as reflected by the 2.1 percent jump by the NYSE Arca North American Telecom Index. The index also reached a record closing high.

Software, networking and biotechnology stocks also saw notable strength, contributing to the advance by the tech-heavy Nasdaq, while real estate and housing stocks moved to the downside.

Other Markets

In overseas trading, stock market across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index surged by 1.7 percent, while South Korea’s Kospi advanced by 0.9 percent.

The major European markets also moved to the upside on the day. While the German DAX Index shot up by 1.2 percent and the French CAC 40 Index jumped by 1 percent, the U.K.’s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries recovered from an early pullback to end day roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down less than a basis point to 4.249 percent after reaching a high of 4.277 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to earnings news from Intel (INTC), with the semiconductor giant among the companies releasing their quarterly results after the close of today’s trading.

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