U.S. Stocks Finish Volatile Session Sharply Higher

After showing a strong move to the upside early in the session, stocks saw significant volatility over the course of the trading day on Wednesday.

The major averages largely gave back their early gains in late morning trading before experiencing an afternoon resurgence and ending the day sharply higher.

The major averages all posted strong gains on the day, partly offsetting the steep drop seen on Tuesday. The Dow surged 588.64 points or 1.2 percent to 49,077.23, the Nasdaq shot up 270.50 points or 1.2 percent to 23,224.82 and the S&P 500 jumped 78.76 points or 1.2 percent to 6,875.62.

The volatility on Wall Street came as traders reacted to President Donald Trump’s latest remarks about his efforts to take control of Greenland.

Early buying interest was generated in reaction to Trump’s speech at the World Economic Forum in Davos, Switzerland, where he ruled out the use of military force to take control of Greenland.

“We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable. But I won’t do that. Okay?” Trump said.

“Now everyone’s saying, ‘Oh, good.’ That’s probably the biggest statement I made, because people thought I would use force,” he continued. “I don’t have to use force. I don’t want to use force. I won’t use force.”

Rather than using military force, Trump called for “immediate negotiations” with Denmark to “discuss the acquisition of Greenland by the United States.”

However, buying interest waned over the course of the morning amid lingering concerns about trade between the U.S. and Europe due to the dispute.

Buying interest re-emerged in the afternoon after Trump said in a post on Truth Social that the “framework” of a deal on Greenland was formed during a “very productive” meeting with NATO Secretary General Mark Rutte.

Based upon this understanding, Trump said he would not be going forward with the tariffs he threatened to impose on several European nations if they opposed his attempt to purchase the Danish territory.

Sector News

Oil service stocks turned in some of the market’s best performances amid an uptick by the price of crude oil, with the Philadelphia Oil Service Index soaring by 4.8 percent to its best closing level in over a year.

Substantial strength was also visible among computer hardware stocks, as reflected by the 4.4 percent surge by the NYSE Arca Computer Hardware Index.

Biotechnology stocks also showed a significant move to the upside, driving the NYSE Arca Biotechnology Index up by 3.6 percent.

Semiconductor, transportation and housing stocks also saw considerable strength, while software and gold stocks bucked the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while Hong Kong’s Hang Seng Index rose by 0.4 percent.

The major European markets also ended the day mixed. While the German DAX Index slid by 0.6 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both inched up by 0.1 percent.

In the bond market, treasuries regained ground after moving sharply lower over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, decreased by 4.2 basis points to 4.253 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to typically closely watched readings on consumer price inflation, although the data for October and November may be seen as old news.

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