U.S. Stocks Recover Half of Prior Day’s Plunge After Trump Calls Off Greenland-Related Tariffs



 

NEW YORK — U.S. equities rebounded sharply on Wednesday, recovering roughly half of the previous session’s losses, after President Donald Trump said he would not move forward, for now, with tariffs linked to Greenland-related tensions with European allies. The comments eased immediate fears of a broader trade confrontation and triggered a relief rally across global markets.


The S&P 500 climbed after posting its steepest one-day decline since October, while the Dow Jones Industrial Average and the Nasdaq Composite also advanced as investors selectively returned to risk assets. Tuesday’s selloff had been driven by concerns that escalating rhetoric between Washington and Europe could translate into concrete trade measures, weighing heavily on technology and growth stocks.


Trump’s remarks suggested a pause rather than a full retreat, signaling that negotiations could continue without the immediate threat of tariffs. Market participants interpreted the shift as a reduction in near-term downside risk, though uncertainty around U.S. trade policy remains elevated.


The prior session had seen the S&P 500 fall more than 2%, the Dow slide nearly 1.8%, and the Nasdaq drop over 2.4%, with heavyweight technology names amplifying losses. Volatility spiked as investors sought protection against geopolitical risk and policy unpredictability.


That defensive stance was evident in commodities and fixed income markets. Spot gold surged above $4,800 per ounce for the first time, extending a powerful rally as investors moved into safe-haven assets. Demand for protection was further reinforced by turmoil in Japan’s sovereign bond market, where a sharp selloff pushed government bond yields to record levels following Prime Minister Sanae Takaichi’s call for a snap election on February 8.


Asian markets were mixed, with most regional indexes extending losses before stabilizing later in the session. U.S. equity futures pointed higher ahead of the Wall Street open, tracking the improved tone after Trump’s comments. Currency markets were more cautious, with the dollar trading unevenly against major peers.


Analysts warned that while the rebound reflects relief, it does not signal a return to calm. “This is still a headline-driven market,” said a senior strategist at a U.S. investment firm. “Trade policy, geopolitics, and sovereign debt risks are intersecting in ways that can quickly reverse sentiment.”


Attention is now turning to Trump’s expected address at the World Economic Forum in Davos, where investors will look for clearer guidance on U.S.-Europe relations, trade strategy, and the administration’s broader economic priorities. Until then, market volatility is likely to remain a defining feature of the trading environment.


FAQs

Why did U.S. stocks rebound after a sharp selloff?
Markets rallied after President Trump said he would not proceed with Greenland-related tariffs, reducing immediate fears of a trade escalation.

Did stocks fully recover their losses?
No. Major indexes regained about half of the prior day’s decline, signaling relief rather than a full reversal.

Why did gold hit record highs at the same time?
Investors sought safe-haven assets amid geopolitical tensions, trade uncertainty, and instability in global bond markets.

Are Greenland-related tariffs completely off the table?
Not necessarily. Trump’s comments suggested a pause, leaving the possibility of future action depending on negotiations.

What should investors watch next?
Key focus areas include Trump’s remarks at Davos, developments in trade policy, and broader signals on global economic stability.


Sources


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