Easing Greenland Tensions May Lead To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Thursday, with stocks poised to add to the strong gains posted in the previous session.

Stocks may continue 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.”

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.

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.

Commodity, Currency Markets

Crude oil futures are tumbling $0.93 to $59.69 a barrel after rising $0.26 to $60.62 a barrel on Wednesday. Meanwhile, after climbing $71.70 to $4,837.50 an ounce in the previous session, gold futures are slipping $12.90 to $4,824.60 an ounce.

On the currency front, the U.S. dollar is trading at 158.70 yen versus the 158.25 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1682 compared to yesterday’s $1.1711.

Asia

Asian stocks advanced on Thursday amid easing geopolitical and trade tensions after U.S. President Donald Trump signaled pausing proposed tariffs against eight European countries over Greenland ownership. Analysts said it was yet another classic TACO (Trump Always Chickens Out) trade.

Gold was little changed at $4,833 an ounce in Asian trading, as fears of the U.S. dollar losing its dominance remained intact. Oil prices traded lower as the glut narrative regained control.

China’s Shanghai Composite Index ended up 0.1 percent at 4,122.58 after a choppy session. Hong Kong’s Hang Seng Index finished 0.2 percent higher at 26,629.96.

Japanese markets rallied as government bonds rebounded for a second straight session, helping ease global market anxiety.

The Nikkei 225 Index surged 1.7 percent to 53,688.89, snapping its five-day losing streak amid gains in semiconductor and artificial intelligence-related shares. The broader Topix Index climbed 0.7 percent to 3,616.38.

Seoul stocks climbed on eased tensions over Greenland and continued optimism over artificial intelligence-driven demand.

The Kospi surpassed the historical 5,000-point mark in intraday trading before closing up 0.9 percent at 4,952.53.

Samsung Electronics and SK Hynix both rose around 2 percent, while top battery maker LG Energy Solution surged 5.7 percent. Automaker Hyundai Motor fell 3.6 percent and Kia Corp. slumped 4.4 percent after recent strong gains.

Investors shrugged off data that showed South Korean GDP unexpectedly contracted 0.3 percent quarter-on-quarter in the October-December period.

Australian markets rose notably after data showed the unemployment rate in the country unexpectedly fell to a 7-month low in December.

The benchmark S&P/ASX 200 Index advanced 0.8 percent to 8,848.70, while the broader All Ordinaries Index closed 0.7 percent higher at 9,172.50.

Oil and gas producer Santos soared 5.3 percent after reporting robust full-year cash flow and operational performance in 2025.

Northern Star Resources slumped 8.4 percent. The gold miner revised its 2026 financial year production and cost guidance, reflecting a number of one-off operational events across its portfolio in the December 2025 quarter.

Fortescue tumbled 5.1 percent as shipments from the Iron Bridge operations missed consensus estimates.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index jumped 1.0 percent to 13,556.87 ahead of the release of fourth quarter inflation data on Friday.

Europe

European stocks have bounced back on Thursday after U.S. President Donald Trump dropped planned tariffs on eight European countries and ruled out using force to take Greenland.

NATO Secretary General Mark Rutte said he had a very productive meeting with Trump on the sidelines of the World Economic Forum in Davos on how NATO allies can work collectively to ensure Arctic security, including not just Greenland but the seven NATO nations with land in the Arctic.

While the U.K.’s FTSE 100 Index is up by 0.4 percent, the French CAC 40 Index and the German DAX Index are both up by 1.0 percent.

Associated British Foods has moved to the upside after unveiling its trading performance over the festive period.

German chemical giant Bayer has also risen after announcing that its investigational cell therapy, OpCT-001, has received Orphan Drug Designation from the FDA for treating retinitis pigmentosa.

Volkswagen, Europe’s largest carmaker, has also moved sharply higher after reporting strong full-year cash flow.

French Transport infrastructure group Getlink has also advanced after reporting stable revenue at just over 1.59 billion euros in 2025.

French telecom operator Orange and Bouygues have also jumped. The companies along with Iliad’s Free said they are in negotiations with Altice Group to buy a large part of its telecommunications activities in France.

Meanwhile, Swedish hygiene products maker Essity has slumped after reporting declining sales volumes in the fourth quarter.

B&M European Value Retail shares have also fallen in London. The discount retailer slashed its full-year outlook after delivering weak Christmas sales.

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.

Meanwhile, the Labor Department said the less volatile four-week moving average slipped to 201,500, a decrease of 3,750 from the previous week’s revised average of 205,250.

The U.S. economy grew by slightly more than previously estimated in the third quarter of 2025, according to a report released by the Commerce Department on Thursday.

The report said real gross domestic product spiked by 4.4 percent in the third quarter compared to the previously reported 4.3 percent surge. Economists had expected the pace of growth to be unrevised.

The Commerce Department said the slightly stronger than previously estimated growth primarily reflected upward revisions to exports and investment that were partly offset by a downward revision to consumer spending.

At 10 am ET, the Commerce Department is due to release its report on personal income and spending in the months of October and November. The report includes closely watched readings on consumer price inflation.

The Treasury Department is scheduled to announce the details of this month’s auctions of two-year, five-year and seven-year notes at 11 am ET.

At 12 pm ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended January 16th. Crude oil inventories are expected to rise by 1.1 million barrels.